SW Aviator Magazine - April/May 1999 issue
NM Director's Corner
by Mike Rice, Aviation Division, NM State Highway & Transportation Department
Legislative Funding Process for the Airport Improvement Program
Prior to 1999, the process for funding New Mexico Airports started with determining a budget for matching funds approximately 12 months prior to the start of the fiscal year (FY). This budget was to include most of the state and local 50/50% matching fund requirements and a conservative estimate of the FAA, state, and local 90/5/5% matching fund requirement.

During the second quarter of the fiscal year, the FAA and the Aviation division would determine matching fund requirements for the remainder of the state fiscal year. The Aviation Division would then request a transfer of funds from the road fund to the aviation fund utilizing the Budget Adjustment Request (BAR) process.

This procedure required Secretary Pete Rahn and the New Mexico State Highway Department Commission to review and approve this transfer of funds. Recognizing the value of 20-to-1 matching funds, they unanimously approved this transfer. The projects would then be completed within the New Mexico Airport System and the 5%+ Gross Receipts Tax on the construction activities would be paid back to the state and local governments.

Prior to the second quarter of FY '99, the Legislative Finance Committee altered some of the BAR's language. This eliminated the ability of the Secretary and the Highway Commission to make a budget transfer from the road fund to the aviation fund when the FAA matching funds became available.

In January '99, the FAA had $8,450,000 available for nine construction projects, five action plans, an economic impact study, and a statewide air service study. The state match was $450,000. In the absence of BAR authority, the Aviation Division was told to request a supplemental appropriation from the road fund through the 1999 State Legislature. Five months later, the legislature refused to grant this transfer of funds.

In April, 1999, the FAA made 2,130,000 available for 11 more AIP projects totalling 2,360,000. The state match requirement for these projects is $135,000. The problem is that, without BAR authority, the SHTD is not able to transfer the funds to the Aviation Division.

The bottom line is that we will be forced to delay or lose close to $11 million in FY '99 AIP projects because we lack the BAR authority to transfer $585,000 from the road fund to the aviation fund.

We have at least two options at this point:

  • Take our losses now, cancel these projects, and allow the FAA to redistribute their funds to the other states in our region (TX, OK, AR, and LA).
  • Commit FY '00 state funds to these FY '99 projects—thus reducing our FY '00 AIP budget by 40% and providing a windfall for the other states in that year.

We welcome your input on other possible solutions.

The U.S. Congress recently passed a four month reauthorization for the FAA, which kept the Airport Improvement Program (AlP) alive—barely.

If and when the reauthorization for the remaining four months of Fiscal Year '99 is passed, it will be very difficult for the airports to take advantage of the AIP funds due to the short time left in the "construction season." Many of the northern tier states have already given up on the availability of any additional funding for FY '99 projects.

The good news from Washington is that Senators Bingaman and McCain, Representatives Shuster and DeFasio, and many others are working hard to get some far-reaching aviation legislation passed this year. This initiative would address a two to four year AlP funding cycle, create a small communities air service subsidy program, take the Aviation Trust Fund "off-budget," and modernize the FAA air traffic control system.

The New Mexico Legislature passed an air service subsidy bill for small communities, which will be administered by the Aviation Division.

The state's senators and representatives have been in a special session considering a budget that will include a $450,000 Supplemental Appropriation for FY '99 to be used for AlP and other programs. They are also discussing a FY '00 budget that will provide $1,300,000 for AIP.

The combination of these two allocations—plus the FAA and local matching funds—mean FY '00 could be the most active airport construction year in modern history.

The National Aeronautic Association has named the 10 most memorable record flights of 1998—and two of them took off from New Mexico.

Will Gadd set a paraglider distance record by flying 179 statue miles, and Ray Yanetz flew a rigid-wing hang glider a record 251 statue miles.

Over the next three months, New Mexico State University and the Aviation Division are meeting with the sponsors of 55 general aviation airports.

The purpose of these meetings is to develop the New Mexico Airport System Plan. This plan will be used for budget forecasting of aviation funding on the FAA and state levels. The town and village government officials have been very active in most of the first 21 planning conferences.

The plan will be published in the fall, along with an air cargo/freight study.

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The material in this publication is for advisory information only and should not be relied upon for navigation, maintenance or flight techniques. SW Regional Publications and the staff neither assume any responsibilty for the accuracy of this publication's content nor any liability arising out of it. Fly safe.