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Legislative Watch

California Senate Bill 1048

Current status: referred to committee 8/19/03. (Not status change as of 10/19/04)

This bill deletes Item 2660-012-0041 of the 2003-04 Budget, which transferred $4,762,000 from the Aeronautics Account in the State Transportation Fund to the General Fund.

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Your help is needed: Senate Bill 1048 - August 5, 2003
from Tom Weil, Airport Manager, California City Municipal Airport

I would like [all pilots] to assist California Airports secure passage of Senate Bill 1048 which restores $4.7 million in funding to the Department of Transportation, Division of Aeronautics by writing letters of support to the party leaders of the Senate. I have included names and address for both at the end of this message.

The Assembly recently adopted this refunding position during the budget compromise and recent signing. The bill used was, SB 1048, which was an air quality bill before the change. Because of this change, the bill has to go back to the Senate when they come off Summer recess on August 18th for concurrence.

Notes on Funding Restoration
Association of California Airports
July 23, 2003

FY 2003/2004 Budget Position
We respectfully request you take the following comments and concerns along with the fact that SBX 19 purposely reinstated the funding for Aeronautics, in consideration when you consider the DOF proposed transfers from Aeronautics Fund for the FY2003/2004 Budget Year.

*Points to Ponder: Aeronautical Division Budget Transfers to the General Fund
(To be used in conjunction with Department of Finance,(DOF)/Legislative Analyst Office, (LAO), ltrs/Senator Ashburn's ltr/ A&D Project Spreadsheet)

*Funding transfers discussed in the DOF and LOA ltr’s have been rolled to the 2003/2004 budget and have been modified to $2.952 million and $4.762 million.

Conflicting Views between DOF and the LAO
The Department of Finance, letter dated May 7, 2003, to the Legislature fails to mention several key issues concerning the proposed transfer of funds from the Division of Aeronautics to the General Fund. (See Attached Letter and LAO report)

Funding Source is the Users of General Aviation not the General Fund
Once again no General Fund revenues or transfers support Division operations and their grant assistance programs. The Legislative Analyst’s Office letter dated April 9, 2003 correctly highlights that funding for the Aeronautics Program is derived solely from an Excise Tax of $.18 cents per on aviation fuel and $.02 cents per gallon on jet fuel which is paid by General Aviation users on top of the normal State and Federal taxes. This equates to roughly $7.72 million per year on average over the past nine years, but which fluctuates considerably with fuel sales. Current projections for fiscal year 2002/2003 reflect $5.5 million revenue flow into the Division, which is a downturn of almost $2 million.

$6 Million previously transferred to General Fund for FY2002/2003
The DOF letter also does not highlight that $6 million dollars was transferred to the General Fund in September 2002 to assist in the budgetary issues facing the State today. There was no consideration of a repayment to be made in the future of these funds which are acquired from the excise tax paid by the users of aviation to maintain the State program of aid to smaller city and county owned airports to maintain safety and infrastructure development that meet the requirements of the California Aviation System Plan.

A&D Grants is the Only Source of Funding Grants for Non NPIAS Airports
The Acquisition and Development Grants, commonly known as A&D Grants, are allocated by the California Transportation Commission airport improvements such as runways, taxiways, and safety related issues. It is a competitive grant that is applicable to the 149 public owned Public Use general aviation airports within the State. For the 30 Non federal NPIAS, (National Plan of Integrated Airport Systems), airports this is the only source of grant funding they are eligible to receive. This alone makes funding these airports imperative to maintain both safety and security, as well as enhancing capabilities, today and in the future.

Airports have spent Money in good Faith based on FY2002 CTC Awards for A&D
The $2.9 million cut proposed by the DOF in the A&D grants also does not take in consideration that over $2.5 million for the City and County Airport projects approved by the California Transportation Commission, CTC, on April 4, 2002 have completed engineering/planning requirements and have expended local funds in good faith for the work to begin summer 2003. Please note the attached letter from Senator Ashburn’s office and the Excel spreadsheet detailing projects affected.

Annual Grant used by many for Airport Improvement Program match

The DOF letter also conflicts with the LAO letter in regards to the possible loss of Federal Aviation Administration Airport Improvement grants citing that this would only occur if alternative funding match were not identified after transfers from the Division of Aeronautics.

The LAO took a more realistic view of the present situation facing cities and counties and state up to $28 million could be in jeopardy if transfers were made. Neither letter addressed the additional FAA funding in the form of the Aviation and Investment Reform Act for the 21st Century that allocated up to $150 thousand dollars to each small General Aviation airport for a three year period. This additional AIP funding, which expires October 2003, will have brought in an additional $53 million at a State Aeronautics match cost of $2.6 million. Currently there is over $36.2 million that may not be fully utilized due to local concerns that match funding by the State will not be available.

The loss of these funds would be a tragic blow to the California economy as well as aviation when federal dollars returning to the State are so limited. The good news is that the program is proposed to resurface in the new October federal budget under the name of Flight 100, which will continue to place additional demands for State matching funds above and beyond the normal federal Airport Improvement Program grants. Guidelines and funding should resemble the current program, however the rollover of funds from AIR 21 is not anticipated.

AIR 21 not accounted for in both DOF & LAO ltrs
Additionally, the lack of funding match has been highlighted in a recent survey conducted by the Aeronautics Division concerning the use of the $10,000 Annual Grant monies to be used in conjunction with federal AIP funds. Out of the 119 airports eligible to receive federal AIP funding 77 have reported back to this point with 44 saying they will use these funds to offset match requirements during the next fiscal year. That is 57% of the airports reporting to date, which is a dramatic change from previous years.
Non NPIAS airports need these Funds

The 30 Non NPIAS airports within the state that draw the $10,000 dollar Annual Grant are used primarily for operation, maintenance, and liability insurance requirements. This is the only source of aviation funding other than the State A&D grant program

Funding Breakout unclear for distribution of Funds to Aeronautics
It should be noted that the DOF letter also highlights that $.09 cents of the current aviation gasoline Excise Tax is protected by federal law from being transferred to non-aviation activities such as the State General Fund. This begs the question “How much of the $.09 cents make up the $3.25 million proposed transfer. And how much of the $.09 was included in the $6 million previously transferred. The Board of Equalization should be able to provide an accurate analysis of the funding breakout to ensure the proposed transfer does not usurp the federal law, which DOF recognizes.

Pending Impact due to GA Security Upgrades to Airports
It is also important to highlight that there will be a meeting in Washington D.C. in July, to discuss with the Transportation Security Administration, FAA, and a variety of General Aviation organizations issues about G.A. airports as a "threat" and TSA thinking on security enhancing initiatives. On the July agenda, of central importance, is the TSA intention to categorize G.A. airports with a "threat level" designation. That threat level designation will consider, amongst other things yet to be identified, runway length & weight bearing capability (related to how big a G.A. aircraft can use the runway); type of based aircraft and the number of based aircraft (connected to the ease of stealing, renting, or hijacking one at a given airport); distance to the nearest major population center, nuclear plant, or other "high value" target, and how to designate/highlight airports within the threat category zones to pilots. This will foreseeably result in additional funding needs for security implementation requirements levied by the Transportation Security Administration and will affect both State and local funding.

FY2002/2003: Aviation has contributed more than their Fair Share to the General Fund
Aviation Users have more than contributed their fair share, $6 million dollars, toward the budget issue this fiscal year. General Aviation aircraft fly 3 flights to every 1 commercial flight made within California and the United States. Maintaining the vital infrastructure links known as airports to sustain this activity throughout the state is the key for long-term economic growth and prosperity. It is essential element of the California Aviation System Plan and is a small price to pay when you take in consideration California boast the 5th largest economy in the world.

The California Transportation Commission, in it’s 2002 Annual Report to the Legislature, cited the fact that approximately $215 million in State and local taxes are collected from the aviation industry annually and that roughly $8 million, (3.25%), is actually directed to meet the needs of aviation.

Senator John Burton
President Pro Tem
State Capitol, Room 205
Sacramento, CA 95814
Phone: (916) 445-1412

Senator James L. Brulte
Capitol Office:
State Capitol, Room 305
Sacramento, CA 95814
Phone: (916) 445-3688
Fax: (916) 327-2272

Thank you so much for taking the time to try an help aviation and airports in California.

Tom Weil, Airport Manager
California City Municipal Airport
Work 760-373-4867
Cell 760-559-5629