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<P mce_keep="true">[quote user="schlimm"] <P>According to the FAA in 2005, the Chicago O'Hare 20 year modernization plan is expected to total $13.3 Bil., second only to Boston's "Big Dig." And that is just <B>ONE</B> airport, although the #1 or #2 in volume. So air has a lot of funding, and they are not certainly paying for it all or they would be out of business.[/quote]</P> <P mce_keep="true">In 2007 and 2008 the FAA allocated $3.5 billion and $3.5 billion for airport improvements. For FY09 the proposed allocation was $2.8 billion. </P> <P mce_keep="true">The only way to identify the airports that received the federal funding would be to plough through the FAA budget and actual expenditures line by line. Suffice it to say, the money goes to many airports. Most of it is for navigational aids, e.g. Doppler radar, ILS systems, tower radar, etc. </P> <P mce_keep="true">As I pointed out in another post, the commercial airlines account for approximately 30 per cent of the FAA's operations, although it is greater at the relatively small number of the nation's hub airports, e.g. DFW, Kennedy, etc. If all the monies in the airport improvement budget went to airports served by commercial airlines, which is unlikely, in the same ratio of airline operations to total operations, the airlines could have realized an indirect benefit of approximately $1.1 billion in FY07, $1.1 billion in FY08, and $840 million in FY09. But 81 per cent of the FAA's budget is covered by ticket taxes, fees, etc. So the amount of the airport improvement benefits flowing from a federal subsidy that might have indirectly benefited the airlines would have been approximately $209 million in FY07, $209 million in FY08, and $159.6 million in FY09. These numbers suggest that a relatively small portion of the O'Hare improvements will be funded by a non-user federal subsidy. </P> <P mce_keep="true">I spent most of my career in the electric utility industry, which is a capital intensive industry not unlike the railroads. Not once, when considering how to meet the growing needs of our expanding customer base, did we make our decision to expand the system, i.e. increase capacity, based on what other electric utilities were doing. We implemented the best solutions for our company's key stakeholders. </P> <P mce_keep="true">The federal, state, and local subsidies received by other modes of transportation are not relevant for deciding how much the U.S. should invest in passenger rail. </P> <P mce_keep="true">It is true that the federal government fostered the development of airways and highways in the U.S., frequently to the detriment of the railways. But the past, using the parlance of cost accountants, is a sunk cost. It is irrelevant. The key question is what to do now? Where is passenger rail the best option for solving the here and now, as well as future passenger transport problems in America? </P>
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