Tuesday, May 11, 2010

The Ann Arbor Airport Expansion Is Not Justified Now

On March 20, 2010, I took a position opposing the expansion of the Ann Arbor Airport. My statement to the news media was as follows:

“I oppose the proposed expansion of the Ann Arbor Municipal Airport as described in the “Preferred Alternative” in the recent draft Environmental Assessment. The changes proposed neither greatly increase safety nor sufficiently enhance the operations of the airport to justify spending taxpayers’ money on the proposed changes now.

None of the stated objectives individually (or even collectively) is sufficient to justify the spending of public taxpayer dollars now. If State Road is widened in the future, then a shift of the runway to the SW would be appropriate, which would achieve objectives 2, 3 and 5.

But wait, “Isn’t this money free, that is, federal money from the Airport and Airway Trust Fund, and if we don’t spend it, someone else will?”

97.5% of the estimated $1.3 million cost would come from that fund, and 2.5% from the airport’s operating fund. However, we need to take a principled view of this “free” money. Everyone acting as if federal money is free is exactly what has gotten us into the U.S. Congressional “earmark” game, as everyone tries to “get their share”, to the point that the whole country suffers from budget deficits and an exploding national debt. If a project is not a good expenditure, it should not matter what the source of the funds are, as ultimately we all are paying the cost.

In this case, the shift of the runway 150’ SW may be needed in the future, but not now. The extension of the runway might never be justified. We ought not to spend these funds now.”

The full statement submitted to the Michigan Department of Transportation can be found here.

Several responses to the statement warranted the following Q and A:

Q: The project would be paid from user fees paid into the Airport and Airway Trust Fund. Why are we worried about the cost?

A: The fact that the cost of the project would come from the Airport and Airway Trust Fund actually creates less of an objection than ordinary Congressional earmarks in that the users of the airport contribute into the fund through their aviation fuel tax. Airplane owners can say that they have already paid for the project through their user fees. For me, the bottom line is that if a project does not generate more benefits than its cost, it does not make economic sense to do the project, no matter what the source is. The fact that the money is “free” does not increase the project's benefits nor decrease its cost.

Q: Doesn’t this endanger the survival of the airport?

A: I support the continued operation of the airport. Nowhere in this discussion have I heard that the proposed improvements are needed to ensure the survival of the airport. The proposed improvement would be nice, but not required by any current FAA regulation for continued operation. The Ann Arbor Municipal Airport serves a useful function, especially for student pilots (which I was one back in 1975 flying out of a grass strip near Mason, MI) which you really want to keep away from the busier airports. If you read the full analysis, you will also see that I would support the shift of the runway 150’ to the SW at such time as State Road is widened, but doing so now with no widening of State Road imminent would not be necessary now.

I would also work to receive funds from the Airport and Airway Trust Fund if the airport ever became in danger of closing due to lack of funds for necessary improvements. While little argument can be made that expansion of the airport would create measurable economic benefit, closure would clearly entail significant economic loss which should be avoided.

Q: If Ann Arbor does not get these funds, someone else will, so why not get our share?

A: That is an argument for every project in the United States, and for every earmark. My best response is to suggest you Google “tragedy of the commons”, which in short, means that when each individual pursues his or her own personal best interest in the use of a common resource, the common resource gets overused to the point that all lose. I know, this is a philosophical argument, but we need to start somewhere.

I understand the need for jobs in this area, and having taken 27 courses in economics over the course of my lifetime, I understand the “multiplier effect” of expenditures in an area (although one can argue just what the multiplier is, from 3 to whatever, depending on the “leakage” from the area economy). So, balancing a principles approach vs. a purely “what’s in it for me (or us)” get tough. On this issue, I have chosen the principled approach.

We will not agree on every issue in the future, but what I pledge is to be willing to take positions based on research of the facts and analyses, listen and consider alternate points of view.

Q: You say you are taking a “principled view” on this issue. Would your stance change if the amount of the project were $10 billion to be spent in our area, instead of the much smaller projected cost of $1.3 million for the proposed expansion?

A: This, like many questions that State Representatives face, is not a question subject to an easy “Yes” or “No” answer. Taking a principled view does not mean we should never take federal money. If the hypothetical case would show significant benefits in excess of the costs, then my answer might well be different. A $10 billion investment into our area would obviously result in a substantial positive economic impact for us, and would be extremely hard to not want.

What many people would miss in their thinking about the costs and benefits in this hypothetical (as well as most other well-meaning government programs) is that the taxes necessary to pay for these “free” projects also destroy as many jobs as they create, in very diffused secondary or indirect effects. Most “tax and spend” programs are zero sum games, in that there are winners and losers, with no net positive impact. The reason they are so popular among people (and their elected representatives) is that the winners are easily identified and vocal, while the losers are harder to identify because the costs are indirect, usually more in number, but each hurt only a little bit and therefore not as vocal.

The issues we face as a community today are often complex and not subject to easy answers. We need to have good dialogue on these important issues. “Politics” is, after all, conversations about important topics leading to ultimate decisions that affect virtually every aspect of our lives. (Although many people say it means "poly" (or many) and "ticks" (or many bloodsucking parasites). :)

I appreciate the opportunity to hear supporting and opposing views. Only by considering all points of view can we be sure we make decisions based on all the facts, rather than on uninformed, predisposed opinions.

1 comment:

  1. Appreciate your views Rick. We're fighting a similar battle down in Greensburg, Indiana. We've tried arguing "its immoral to take away landowner's freedom to keep their land"...nothing. We've argued, "airports are not the economic engine they are touted to be"...nothing. We argued "our critical aircraft numbers are primarily derived from one company who is now out of business"...nothing. We've argued "snow removal will effect downstream water quality"...nothing.

    And its because we've allowed this nation to believe that Uncle Sam is the solution to all life's problems and the start of all life's processes.

    If you're interested in seeing a "Study of 45 General Aviation Airports and their effect on Employment and Income" and how they compared to the national average please visit my blogpost...click here.

    Best of luck.

    Every attempt to make the same arguments you're making here has been met with "we're still pushing forward" mentality. It's sad