LaGaurdia Airport in NYC Office of the Governor of New York According to The Points Guy website, the 10 worst airports in the US ranked by highest rate of delays and cancellations, and “extortionate” parking fees are:

1 New York City, LaGuardia

2 New York City, John F. Kennedy International

3 Newark, New Jersey, Liberty International

4 Chicago, Illinois, O’Hare International

5 Detroit, Michigan, Metro

6 Orlando, Florida, International

7 Washington, D.C., Dulles International

8 Denver, Colorado, International

9 Los Angeles, California, International

10 Houston, Texas, George Bush Intercontinental

Anyone who has attempted air travel of late has likely felt the pain of one form of delay or another, and more likely than not driven through a war zone of pot hole filled roads just to get to the airport.

One of the key tenants of President Trump’s campaign platform was to “Transform America’s crumbling infrastructure into a golden opportunity for accelerated economic growth and more rapid productivity gains.” Given that the Society of Civil Engineers America’s cumulative GPA for infrastructure is a D+ there is much work needed to be done.

We've written about this issue previously, and in some respects it meshes well with certain aspects of our Tooling & Re-tooling and Economic Acceleration/Deceleration investment themes.

Given Trump’s background in construction, as well as his frequent complaints about US airports during the campaign, domestic infrastructure should get a helping hand under the Trump administration.

Sounds good, but with the country’s debt continuing to climb, the looming question is how to pay for those infrastructure repairs and upgrades that will help spur not only quality jobs, but make US infrastructure far more competitive. It’s not a small price. The Society of Civil Engineers estimates $3.6 trillion would need to be spent in the next few years to tackle the problem.

Let’s use the airport example from above, which received a GPA grade of D, as it encompasses several aspects including airports, air traffic control systems, aircraft and travelers. The FAA estimates that the national cost of airport congestion and delays was almost $22 billion in 2012 and is expected to rise to $34 billion in 2020 before going on to $63 billion by 2040 if current funding levels are maintained.

Per data published by the Federal Aviation Administration in 2014, “In 2012, aviation accounted for 5.4% of our gross domestic product (GDP), contributed $1.5 trillion in total economic activity, and supported 11.8 million jobs” with more than 61.2 billion revenue ton-miles (RTM) of freight passing through US airports. For those unfamiliar, the US has 3,330 existing public use airports and 25 proposed airports, which make up the National Plan of Integrated Airport Systems (NPIAS).

As one might expect, the 60 largest airports in the US serve nearly 90% of air travelers. Clearly the GPA grade of D is a pain point for the economic engine that is US airports, but again there is the question of how to pay for these needed upgrades and repairs?

Currently, the Airport Improvement Program (AIP) provides federal grants for capital improvements at public-use airports, which are primarily by federal taxes on commercial airline passengers and various aviation activities. Under the hood we find those 60 largest airports that serve the vast majority of travelers only receive 27% of AIP grants despite the wear and tear, and other capital investment needs. Non-commercial airports—which serve less than 1% of commercial fliers—receive about 30% of AIP grants. This has led to the thought that the AIP is essentially a redistribution mechanism that re-routes federal taxes from their generation source to other airport.

That’s the first shoe, and the second is airports are restricted by the federal government when it comes to their revenue generation under the Anti-Head Tax Act of 1973 and price controls on the Passenger Facility Charge. The bottom line is under the current setup airports are fairly limited when it comes to the ability to obtain funding to address the aging infrastructure.

The Heritage Foundation, however, offers a differentiated vision for paying for these much needed airport infrastructure upgrades. A paper titled, “End of the Runway: Rethinking the Airport Improvement Program and the Federal Role in Airport Funding” by Michael Sargent argues that, “Congress should eliminate the AIP, reduce passenger ticket taxes, and reform federal regulations that prohibit airports from charging market prices for their services. These reforms would eradicate the inefficient and inequitable distribution of flier resources and would allow airports to fund capital improvements in a local, self-reliant, and free-market manner.”

Sargent goes on to write that, “airport funding should be localized by eliminating the burdensome Airport Improvement Program and its related taxes while empowering airports to generate and spend their own revenues through airport user fees.” Should these overhauls occur, airports would become updated and modernized leading to job growth and equipment demand at companies like Caterpillar, Terex, Granite Construction, Vulcan Materials, and US Concrete to name a few.

Leading Members of Congress like, House Transportation Committee Chairman Bill Schuster (R-PA) and conservative firebrand Rep. Thomas Massie (R-KY) would be wise to adopt these ideas. Federal micromanagement would be reduced, and the US economy would be better off without the weight and cost of federal spending. Now that sounds like part of a plan to make America great again.