Oregon's Skewed Funding Priorities

One Airport for Every 14 Pilots, Only One School for Every 433 Public School Children

By Miki Barnes, MSW, LCSW
June 13, 2013

Over the past decade while laying off teachers, increasing class sizes, cutting educational funds, slashing services for the mentally ill, raising college tuition, eroding environmental safeguards, and neglecting the arts, the state and the federal government have invested millions of dollars into Oregon airport projects that benefit an affluent few.

According to the Oregon Department of Aviation (ODA) annual report for 2009-2010[1], as of 2008 there were 97 public use and over 350 private use airports for a combined total of 447 general aviation airports in Oregon to serve the state's 6,032 pilots.[2] This number, which represents less than one-sixth of one percent of the state's total population, translates into a ratio of 13.49 pilots to each GA airport in the state.

By contrast, the Oregon Blue Book states that during the 2010-2011 school year Oregon administered 1,296 public schools for the 561,328 kindergarten through twelfth grade students enrolled[3] (14.4 % of the state’s population), a ratio of 433 students per school. Thus the proportion of airports per Oregon pilot exceeds the school to student ratio 32 times over.

Every dollar spent on aviation translates into less funding for job creation in the public sector where educators, health care providers, social service workers, affordable housing specialists, and environmental advocates are desperately needed.

An assessment of the literature on airport funding exposes the entrenched system of corporate welfare that pervades the aviation system not only in Oregon but throughout the country - an unsustainable situation that has led to a chronic reliance by the aviation sector on public funding while maintaining the false pretense of creating jobs and fueling the economy. In order to preserve this imbalanced system, numerous public sector employees have either lost their jobs due to lay-offs or were never hired in the first place due to job creation failure.

Temporary Assistance to Needy Airports (TANA) Proposal

In the 1990's during the Clinton administration, the welfare to work program was initiated in response to a determination that public assistance fostered an unhealthy reliance on government programs. Reducing federal spending was also a stated goal. These sentiments ultimately led to the launch of the Temporary Assistance to Needy Families (TANF) program - a core tenet of which was that individuals receiving benefits were expected to be self-sustaining within the space of a few years.

A similar approach should be instituted to address airport funding, particularly airports that primarily serve general aviation activity as opposed to commercial passenger service. Many airport owners and their tenants have received public assistance for decades, and as a result, have evidently failed to develop the business acumen to maintain their residential airparks or to run their aviation businesses without the benefit of public handouts. Clearly, subsidizing the one percent that historically utilizes Oregon's general aviation airports is proving to be an expensive and onerous burden. The time has come to stanch this economic hemorrhage and redirect these monies towards much needed investments in education, the social services, the arts, affordable housing, the environment, and responsible transportation alternatives. For far too long the 99 percent have underwritten the financial demands of entitled corporate jet and private aircraft owners who anticipate living on the public dole into perpetuity.

In addressing the learned dependency of the aviation sector, it may be advisable to follow the Department of Human Service's lead by setting up a TANA Self Sufficiency office tailored to address the unique needs of the target population. This could potentiate job creation opportunities wherein the two programs could dovetail. Participants in the TANF job training program could receive specialized instruction aimed at assisting the aviation sector in adjusting to a self reliant model. Many of these young struggling parents have extensive experience in enduring and overcoming hardships in the face of ever dwindling resources.

It is worth noting at this juncture that in the case of welfare to work clients, ownership of corporate jets and other high end aircraft would render them ineligible for benefits. Per the Oregon Department of Human Services website, TANF assists low income families in achieving self sufficiency. To qualify, "families must have very few assets and little or no income. The current maximum monthly benefit for a family of three is $506."[4] Likewise, the same expectation should apply to those who own airports, private jets, and expensive aircraft, as they have the option of selling their high end assets to feed their families and pay their rent as well as to generate income to cover airport infrastructure, runway maintenance, hangar construction, and other aviation related business expenses.

Funding Oregon's Airports — A Losing Proposition

Despite massive public subsidies the majority of Oregon's airports, most of which serve private aviation related business interests, either fail to generate revenue or chronically lose money. Per the Oregon State Department of Aviation, "Since 2009, over 289 million dollars in FAA funds and over 89 million in ConnectOregon funding have maintained and improved the infrastructure of Oregon airports."[5] The primary beneficiaries of this lavish 378 million dollar outlay are an affluent few who own and operate their own airports, own private aviation related businesses and flight training schools, can afford to invest in multi-million-dollar jets, and those with the financial wherewithal to own private aircraft and helicopters worth hundreds of thousands of dollars. In other words, scarce federal and state dollars are routinely funneled into the hands of the top one percent and other high end wage earners while simultaneously and habitually shortchanging education, the environment, social services, health care, high speed rail, the arts, and other worthy programs.

Aron Faegre, an airport planner who has been involved in many statewide airport consulting and expansion projects, describes general aviation as, "all of the various aircraft operations for business, private, public, and recreation activities that are not under the category of scheduled airline or freight, or military."[6] He notes that "since the 1980's the economics of general aviation (GA) has been weak."[7] Faegre puzzles over why general aviation airports that receive 95% of their funding from the federal government still have a hard time breaking even and aptly points out, "Any private developer of commercial or industrial properties would love to have 95% funding for their projects." [8] Alarmingly, Faegre's so-called "solution" involves privatizing airports while continuing to take millions from public coffers. An example of this privatization model is Aurora Airport, where most of the businesses that benefit from this funding scheme are located on adjacent properties rather than within the boundaries of the airport. Though the FAA frowns on this arrangement, the state advocates allowing them to access the airport via private taxiways. This approach to privatization requires the public to foot the bill for infrastructure including air traffic control towers, runway rehabilitation projects, airport expansions, and more, so that well-heeled airport owners and business interests can profit at public expense.

To make up the 5% to 10% not funded through the FAA, airport owners and aviation interests seek funding through the Oregon Department of Aviation, the Oregon Department of Transportation and grants via ConnectOregon and other state programs. Due to changes in the FAA Reauthorization Reform Act of 2012, the federal government now covers only 90% of the expense of running an airport, which may help to explain why Oregon's 2013 budget intends to allocate not only lottery dollars but also to raid the general fund in an effort to underwrite these questionable projects. Why are the federal government and the state foisting the cost of subsidizing non-revenue generating transportation boondoggles onto Oregon residents who neither use nor benefit from these facilities? The documented history of financial losses at these airports suggests that this floundering business model runs counter to the greater good.

Port of Portland General Aviation Airports Operate at a Loss

Port of Portland Ordinance No. 389-R Section 1.1.6 as of 2/28/13 acknowledges that, "Portland Hillsboro Airport, Portland Mulino Airport, and Portland Troutdale Airport have sustained net losses throughout their respective periods of operation by the Port and have never produced revenues sufficient to offset the Port's operating and capital costs for aeronautical assets in use at such airports"[9] The Port has owned and operated the Hillsboro Airport for 46 years, Troutdale Airport for 70 years and Mulino Airport from 1988 to 2007.

A 2/13/13 revision to the Ordinance now states that Hillsboro and Troutdale "have recently produced revenues sufficient to offset the Port's operating costs although not sufficient to offset capital costs for aeronautical assets in use at such airports..."[10] These capital costs are significant and typically rely heavily on public funding, thus the claim that these facilities are now generating revenue is spurious at best. In fact, the Final Draft of the 2013 Port of Portland Transportation Improvement Plan includes a number of multi-million dollar projects, totaling out to over $42 Million for the Hillsboro Airport over the next five to 10 years. Most are listed as "unfunded" excepting a $4 Million Connect Oregon III grant, which was disbursed to the Port for Taxiway D even though the entire runway/taxiway project was remanded by the Ninth Circuit Court of Appeals for further environmental review. That the state funded this project regardless of the court decision strongly suggests that the ConnectOregon program maintains an attitude of utter indifference to established national environmental laws as well as the health and well being of the community.

The Port also lists more than $18 Million in unfunded projects for the Troutdale Airport. Thus Hillsboro and Troutdale Airports' project costs combined top out at over $60 Million over the next decade. This is a hefty sum to invest in historically non-revenue generating facilities that primarily serve the for-profit flight training industry and recreational pilots. Surely public dollars can be spent more wisely.

Most Oregon State Owned Airports Losing Money

Other airports around the state are also chronically dependent on public handouts. According to the Oregon Department of Aviation ODA 2011-2012 Annual Report,[11] the ODA owns and operates 28 state airports. All but six of these facilities lost money during the biennium ending in June of 2011. Those listed in the black - Aurora, Independence, Lebanon, Mulino, Cottage Grove, and Nehalem Bay - are discussed below. Financial information on these airports was obtained from Oregon Department of Aviation (ODA) Annual Reports from 2001 to 2012. All are available at the ODA website http://www.oregon.gov/aviation/Pages/index.aspx. The data on aircraft operations specific to the individual airports is available at the Federal Aviation Administration website www.faa.gov in the Terminal Area Forecasts (TAF) section.

Aurora Airport

Aurora Airport which "accommodates a significant amount of business jets and training activity"[12] has, over the past 12 years, received more than $11 Million in government aid including $673,800 from the FAA and a $2.7 Million ConnectOregon III grant for a controversial air traffic control tower. Aurora logs around 100,000 operations annually.[13]

The ODA is currently promoting a multimillion dollar runway lengthening project at this facility[14] to accommodate larger corporate jets, primarily on behalf of non-airport tenants who benefit from the airport but pay no rent to help cover operating costs. This expansion, which would compromise prime farmland in the vicinity of the airport, is opposed by many in the local community.[15]

Per aviation consultant Aron Faegre, "A non-towered airport with a single runway and two parallel taxiways has a typical aeronautical capacity of approximately 200,000 annual operations. Most of Oregon's 100 public GA airports operate at a capacity that is less than one-tenth of this capacity."[16] Thus the need for this expensive undertaking is in question.

So what is the financial return on the millions invested at this airport? In the biennium ending in June of 2011 Aurora posted a profit of $111,756 and $142,108 in the previous biennium,[17] a mere pittance compared to the millions flung at this facility over the past decade. This is apparently what passes as a flourishing aviation business model in Oregon. Others call it shameful exploitation and an indefensible misuse of public funds on behalf of an entitled few.

Aurora is the only state owned airport posting a profit during the biennium ending in June of 2011 that experienced an increase in operations in 2011[18], primarily on behalf of student pilots, recreational enthusiasts, and business jets that are not even located on airport property.

Independence Airport (7S5)

A shining example of the benefits accorded to those who can afford to park an airplane in their driveway instead of a car is the Independence Airport. This facility, which per the ODA "is operated as a residential airpark with taxiways from the existing runway/taxiway system leading to hangars attached to single family homes,"[19] has received more than $2.5 Million in state and federal aid since 1999. Independence Airport posted a profit of $78,845 in the biennium ending in June 2011 and $142,308 in the previous biennium.[20] The annual operational count at this facility dropped by over 25% in 2011, from 44,146 in 2009 to 33,658.[21]

Mulino Airport (4S9)

This airport was under Port of Portland ownership for 30 years during which time it routinely failed to generate revenue. In 2007 it was transferred over to the ODA. Between 2009 and 2011 Mulino's annual operational count dropped by close to 50% from a high of 39,663 in 2009 to 21,300 in 2011.[22] Since 2002 Mulino Airport has been on the receiving end of more than $2.25 Million in funding from Port of Portland, federal and state sources.

Cottage Grove Airport (61S)

Cottage Grove Airport logged $11,517 in profits in the biennium ending in June of 2011 but lost $45,987 in the previous biennium.[23] The annual operational count at this facility declined by 728 between 2009 and 2011, from 17,413 to 16,685.[24] Since 2000, this facility has received more than $2.75 Million in government aid including more than $230,000 from the state.

Lebanon Airport (S30)

Annual operations at the Lebanon Airport, which realized a $1,962 profit in the biennium ending in June of 2011,[25] dropped by nearly two-thirds between 1994 and 2011, from 26,600 to 9,855.[26] This airport received over $2 Million in government aid between 2003 and 2010 including a Connect Oregon Rural Airport grant of $18,995.

Nehalem Bay (3S7)

This writer was unable to find a listing for this facility on the Federal Aviation Administration (FAA) Terminal Area Forecast (TAF) website; however, according to AirNav, this coastal airport located a couple miles from Manzanita averages 43 operations per week, which equals 2,236 annually[27]. "There are six campsites on the airport..."[28] In the biennium ending in June of 2011, this facility logged $468 in profits but lost $6,780 in the previous biennium.[29] Nehalem Bay has received more than $92,000 from the state since 2005.

Operations at Oregon's Commercial Airports On the Decline

The operational count at Oregon's commercial airports is also trending downward. Many focus more on serving the general aviation sector than on the provision of commercial passenger transport.

Portland International Airport

Portland International Airport (PDX) serves as a prime example of the decline in annual operations at Oregon's commercial facilities. Since 2001 PDX received over $32 Million in federal aid and $14 Million from the state including ConnectOregon grants totaling at least $13.75 Million.[30] Yet these generous cash infusions did not prevent this airport from plummeting to an operational count that marks a 27 year low, commensurate with 1985 levels. In 2011 it logged 220,874 operations, 106,000 fewer flights than it did in 1997 when it peaked at an all time high of 327,731.[31]

Eugene Mahlon Field

Eugene Mahlon Field, the second largest commercial airport in Oregon, has also been a frequent recipient of federal and state dollars. This airport was awarded ConnectOregon grants of $4,103,461 for an air cargo facilities improvement project and $451,111 for a ramp reconstruction[32] as well as a combined total of at least $735,206 in ConnectOregon Rural Airport (CORA) subsidies. Federal aid since 2001 exceeds $22 Million. Even so, Eugene's annual operational count plunged by more than 50 percent, from over 161,653 in 1991 to 69,676 in 2011.[33] Approximately two-thirds of Eugene's 2011 annual operational count was related to general aviation activity. Less than 10 percent were air carrier commercial passenger flights.

Roberts Field - Redmond

Roberts Field in Redmond is a recipient of several ConnectOregon grants - $1.5 Million for a cargo ramp and development project, $7.5 Million for a terminal expansion, and $350,000 for a taxiway and reconstruction project.[34] In addition, it received at least $387,500 from the ConnectOregon Rural Airports (CORA) fund as well as more than $21 Million in federal dollars between 2001 and 2012. Yet despite these extravagant handouts, total operations tumbled from a high of 94,936 in 2007 to 46,510 in 2011.[35] Approximately 75 percent of the 2011 flights were general aviation operations.

Pendleton

Pendleton's Eastern Oregon Regional now logs less than a third as many operations as it did in 1998 when it peaked at 41,214. By 2012 its annual operational count had fallen to 12,221. The majority are general aviation flights. FAA forecasts expect operations at this facility to drop even further to 11,555 by 2013.[36] Pendleton received $108,213 in ConnectOregon Rural Airport (CORA) grants in 2009-2010. Since 2001, this facility has received more than $5.25 Million in federal assistance and $1.4 Million in state subsidies.

Rogue Valley

Rogue Valley International in Medford is down from 94,007 total operations in 1992 to 43,422 in 2011. Operations are expected to continue declining over the next few years.[37] More than half of this facility's 2011 operations were general aviation flights - a combination of recreational and training activity. This facility has been awarded over $9.5 Million from ConnectOregon[38] as well as two ConnectOregon Rural Airport grants, one for $85,257 and another for $59,849 for a combined total of $145,106, plus upwards of $21.5 Million from the FAA since 2001.

Klamath Falls

The operational count at Klamath Falls plummeted to a 20 year low in 2009 and is expected to level out at 37,695 after peaking at 83,946 in 1992.[39] This facility received $1 Million from ConnectOregon for a jet factory service center,[40] as well as two ConnectOregon Rural Airport grants, one for $52,631 and another for $84,210. Since 2001 more than $10 Million in FAA funding has been poured into this facility. Over one third of the flights in and out of this airport in 2011 were general aviation flights.

Southwest Oregon Regional

Southwest Oregon Regional, formerly North Bend, received $10 Million from the Oregon Legislature in 2005. In addition it was awarded a ConnectOregon IV grant of $2,392,811 for a hangar demo and reconstruction project as well as an earlier ConnectOregon grant of $624,000 for an air traffic control tower.[41] This facility has also received $133,769 in ConnectOregon Rural Airport grants. Operation at this airport peaked at 57,722 in 1999 before tumbling to 21,036 in 2011.[42] Southwest Oregon Regional received in excess of $8 Million in federal funding since 2001. More than half of the flights arriving and departing from this facility in 2011 were general aviation operations.

Salem-McNary Airport

Over a four year period from 2007 through 2011 the annual operational count at Salem McNary Airport plummeted from 99,432 to 33,901.[43] This represents a drop of more than 63 percent. Operations at this facility are expected to remain on the decline for the next decade. Since 2001, Salem received more than $4.3 Million in federal aid and an additional $4 Million from the state including $3.8 Million in Connect Oregon funds and a $52,631 ConnectOregon Rural Airport (CORA) grant. It remains unclear as to why urban airports such as Salem and Redmond are receiving money specifically set aside for rural airports. Salem recently lost its designation as a commercial airport and is now classified as general aviation.

Astoria and Newport Airports' aspirations for commercial status were stymied by the loss of a controversial $3.6 Million ConnectOregon SeaPort Airline subsidy,[44] which was discontinued due to lack of passengers using the service.

Concluding Remarks

The FAA and State of Oregon's long standing policy of flinging generous cash awards at poorly performing airports must be terminated. During the past 12 years over $186 Million in public money was either spent or earmarked on behalf of the airports reviewed in this paper yet the majority, if not all, of these facilities fail to generate revenue. In addition, their collective operational count is on a dramatic downward spiral.

A number of airports not mentioned in this report including, but by no means limited to, Hillsboro, Troutdale, Scappoose, McMinnville, Tillamook, and Astoria along with numerous other state airports are typically receiving regular handouts to keep them afloat or for questionable expansion projects. Airports throughout Oregon - commercial, public and private - have plenty of excess capacity, thus there is no justification for expansion projects that encroach on prime farmland, erode livability, generate excessive noise, spew lead and other toxins, increase CO2 emissions, lower property values, and compromise the quality of life for Oregon residents.

Pending a full scale open, transparent, and comprehensive investigation, a moratorium should immediately be placed on all state and federal funding for Oregon airports. Strictly enforced requirements should be instituted to insure that public money does not subsidize private airparks, flight training schools, private aviation businesses and runway extensions on behalf of wealthy private jet owners. Monies currently earmarked for airports should be redirected to environmentally sustainable transportation alternatives such as high speed rail. The millions saved could also be dispersed to education, the social services, environmental safeguards, and other public sector programs that benefit the majority rather than an affluent few.

Sources

[1] Oregon Department of Aviation Annual Report 2009-2010. Available online at http://www.oregon.gov/aviation/docs/FY_2011_2012_Annual_Report.pdf. Pg. 7.

[2] Ibid. Pg. 12.

[3] Public Education in Oregon. Oregon Blue Book. Available online at http://bluebook.state.or.us/education/educationintro.htm.

[4] TANF. State of Oregon website. Available online at http://www.oregon.gov/dhs/assistance/pages/cash/tanf.aspx.

[5] Oregon Department of Aviation Annual Report July 1, 2011 Through June 30, 2012. Available online at http://www.oregon.gov/aviation/docs/FY_2011_2012_Annual_Report.pdf. Pg. 9.

[6] Faegre, Aron. The Public Benefits of Private Development at Public Airports. (June 2004), Pg. 1.

[7] Ibid.

[8] Faegre, Aron. The Public Benefits of Private Development at Public Airports. (June 2004).

[9] Port of Portland. Agenda. Regular Board of Commissioners Commission Meeting. Second Reading and Enactment. Amended and Restated Ordinance No. 389-R. of the Port of Portland. (3/13/13).

[10] Ibid.

[11] Oregon Department of Aviation Annual Report July 1, 2011 Through June 30, 2012, Available online at http://www.oregon.gov/aviation/docs/FY_2011_2012_Annual_Report.pdf. Pg. 40.

[12] Ibid. Pg. 14-15.

[13] Federal Aviation Administration. Terminal Area Forecast. (January 2013).

[14] Johnson, Patrick. Aurora Airport Master Plan Contains More Than $20 In Projects. Canby Herald. (9/28/11). Available onlineat http://friendsoffrenchprairie.org/pdf/Canby_Herald_Aurora_Airport_Master_Plan_contains_more_than_$20_million_09-28-11.pdf.

[15] Aurora Airport Land Use Issues. Friends of French Prairie website. Available online at http://friendsoffrenchprairie.org/issues-airport.html. (Updated 1/28/13).

[16] Faegre, Aron. The Public Benefits of Private Development at Public Airport. (June 2004). Pg. 3.

[17] Oregon Department of Aviation Annual Report July 1, 2011 Through June 30, 2012, Available online at http://www.oregon.gov/aviation/docs/FY_2011_2012_Annual_Report.pdf. Pg. 40.

[18] Oregon Department of Aviation Annual Report July 1, 2010 Through June 30, 2012. Available online at http://www.oregon.gov/aviation/docs/resources/FY2010_11_Annual_Report.pdf. Pg. 32.

[19] Oregon Department of Aviation Annual Report July 1, 2010 Through June 30, 2012. Available online at http://www.oregon.gov/aviation/docs/resources/FY2010_11_Annual_Report.pdf. Pg. 32.

[20] Oregon Department of Aviation Annual Report July 1, 2011 Through June 30, 2012, Available online at http://www.oregon.gov/aviation/docs/FY_2011_2012_Annual_Report.pdf. Pg. 40.

[21] Federal Aviation Administration Terminal Area Forecast. Detail Report. (January 2013).

[22] Federal Aviation Administration Terminal Area Forecast. Detail Report. (January 2013).

[23] Oregon Department of Aviation Annual Report July 1, 2011 Through June 30, 2012. Available online at http://www.oregon.gov/aviation/docs/FY_2011_2012_Annual_Report.pdf. Pg. 40.

[24] Federal Aviation Administration. Terminal Area Forecast. (January 2013).

[25] Oregon Department of Aviation Annual Report July 1, 2011 Through June 30, 2012. Available online at http://www.oregon.gov/aviation/docs/FY_2011_2012_Annual_Report.pdf. Pg. 40.

[26] Federal Aviation Administration. Terminal Area Forecast. (January 2013).

[27] Nehalem Bay State Airport. 3S7. AirNav.com. Available online at http://www.airnav.com/airport/3S7. (5/2/13).

[28] Oregon Department of Aviation Annual Report July 1, 2011 Through June 30, 2012. Available online at http://www.oregon.gov/aviation/docs/FY_2011_2012_Annual_Report.pdf. Pg. 21.

[29] Ibid. Pg. 40.

[30]. Connect Oregon Report. Oregon Department of Transportation. Appendix 2 Funded ConnectOregon Projects. Available online at http://www.oregon.gov/ODOT/TD/TP/CO/ConnectOregonReport.pdf.

[31]. Federal Aviation Administration. Terminal Area Forecast Detail Report. (January 2013).

[32]. Connect Oregon Report. Oregon Department of Transportation. Appendix 2 Funded ConnectOregon Projects. Available online at http://www.oregon.gov/ODOT/TD/TP/CO/ConnectOregonReport.pdf.

[33]. Federal Aviation Administration. Terminal Area Forecast. (January 2013).

[34]. Connect Oregon Report. Oregon Department of Transportation. Appendix 2 Funded ConnectOregon Projects. Available online at http://www.oregon.gov/ODOT/TD/TP/CO/ConnectOregonReport.pdf.

[35]. Federal Aviation Administration. Terminal Area Forecast. (January 2013).

[36]. Ibid.

[37]. Ibid.

[38]. Connect Oregon Report. Oregon Department of Transportation. Appendix 2 Funded ConnectOregon Projects. Available online at http://www.oregon.gov/ODOT/TD/TP/CO/ConnectOregonReport.pdf.

[39]. Federal Aviation Administration. Terminal Area Forecast. (January 2013).

[40]. Connect Oregon Report. Oregon Department of Transportation. Appendix 2 Funded ConnectOregon Projects. Available online at http://www.oregon.gov/ODOT/TD/TP/CO/ConnectOregonReport.pdf.

[41]. Connect Oregon Report. Oregon Department of Transportation. Appendix 2 Funded ConnectOregon Projects. Available online at http://www.oregon.gov/ODOT/TD/TP/CO/ConnectOregonReport.pdf.

[42]. Federal Aviation Administration. Terminal Area Forecast. (January 2013).

[43] Ibid.

[44] Connect Oregon Report. Oregon Department of Transportation. Appendix 2 Funded ConnectOregon Projects. Available online at http://www.oregon.gov/ODOT/TD/TP/CO/ConnectOregonReport.pdf.