Airport Alert: Biden Administration Releases FY22 Budget Request

May 28, 2021

The Biden Administration today released a $6 trillion budget request for Fiscal Year 2022 that proposes funding for a long list of airport-related initiatives in the Departments of Transportation and Homeland Security.  While the adage that the President proposes and the Congress disposes will undoubtedly prove true with regard to the upcoming budget process, today's action will help guide Democratic lawmakers as they put together their annual appropriations bills and prepare to move on a massive infrastructure package.

As expected, the DOT portion of the administration's budget request proposes $3.35 billion for the traditional Airport Improvement Program and no supplemental funding for airport infrastructure projects outside of its infrastructure plan.  However, the lack of supplemental funds is more of an inside baseball budget move rather than a reflection of the administration's commitment to airports. 

To the contrary, the budget request highlights the White House proposal to dramatically increase funding for airports in its infrastructure plan, which currently stands at $1.7 trillion. The American Jobs Plan proposes an additional $25 billion for aviation including $10 billion for AIP and $10 billion for terminal projects.  The White House indicates that its plan will "make our airports the best in the world."  

On the DHS front, the White House keeps overall homeland security funding flat. However, on a positive note, the Biden Administration does not propose shifting federal responsibilities for law enforcement officer reimbursements or staffing exit lanes on to airport operators as previous budget proposals did. 

Department of Transportation
 
Federal Aviation Administration

Overall Funding: The administration's FY22 budget request includes approximately $18.5 billion for the FAA in FY22 – a $488 million increase before factoring in the proposed funding levels contained in the American Jobs Plan. 

Airport Improvement Program

Traditional AIP Funding: The administration is proposing $3.35 billion for the traditional Airport Improvement Program in FY22 – the same as the current funding level.  Of that amount, $127.2 million would go toward personnel costs, $15 million for the Airport Cooperative Research Program, and almost $41 million for Airport Technology Research.  

Supplemental AIP Funding: As we indicated last month when the administration released its "skinny" discretionary request for FY22, the White House is proposing to zero out $2.9 billion in general fund transfers for transportation that Congress approved as part of the FY21 budget.  Lawmakers relied on those transfers to "plus-up" AIP by $400 million and to increase funding for highways and transit by $2.5 billion in FY21.   

Infrastructure Funding

The administration's budget request highlights and elaborates on the American Jobs Plan.  The White House infrastructure plan "proposes to boost investment in our airports and National Airspace System (NAS) by $25 billion, including a $10 billion increase in funding for the Airport Improvement Program, $5 billion in additional upgrades to NAS assets that ensure safe and efficient air travel, and a new $10 billion program to support terminal renovations and multimodal connections for affordable, convenient, car-free access to air travel."

Budget documents indicate that the $25 billion proposed in the American Jobs Plan would be spread out over five years:  $5.5 billion in FY22, $5.5 billion in FY23, $4.5 billion in FY24, $4.5 billion in FY25 and $5 billion in FY26. 

Additional AIP Funding: The administration indicates that its plan to increase AIP funding by $10 billion "will boost funding to the Airport Improvement program to fund projects that electrify equipment, reduce airport emissions, mitigate noise pollution, and provide other benefits to surrounding communities." 

Airport Terminal Renovation Grants Program: The American Jobs Plan includes another $10 billion for a new airport terminal renovation grants program.  A summary of the FY22 budget request indicates that the proposal would "establish a new competitive grant program for airport terminal redevelopment, including multimodal transportation connections." 
 
FAA National Airspace System Facilities: This administration's infrastructure proposal also calls for $5 billion to upgrade National Airspace Facilities.  Budget documents say the plan "would replace and modernize aging Federal Aviation Administration facilities and equipment that directly support National Airspace System operations." 

Funding for Other FAA Programs
 
Operations: The White House proposal includes more than $11.4 billion for FAA operations -- almost $372 million above the current level.  Under the administration's plan, $8.434 billion of that amount would come from the Airport and Airway Trust Fund.  
 
Facilities and Equipment: The administration is proposing to increase funding for FAA Facilities and Equipment to slightly more than $3.4 billion in FY22 -- $395 million more than the current level.  

Of that amount, $1 billion would go toward improving "the condition of FAA facilities and ensure that the systems and the staff housed within them remain safe and operational."  Another $321 million would be used to replace "10 air traffic control facilities serving terminal airspace."
 
Research, Engineering, and Development: The White House is proposing to increase funding for the FAA's Research, Engineering, and Development account by $60.5 million to $258.5 million in FY22.  

Small Community Programs
 
Contract Towers: The administration's budget does not include a specific requested funding amount for the Contract Tower Program.  The final FY21 spending bill included $172.8 million in dedicated funding for the Contract Tower and Contract Tower Cost-Share programs, and we're proposing to increase that amount to $178 million in FY22.  

Essential Air Service: The administration's budget request includes $247.7 million in appropriated funds for the EAS program – up from the current level of $141.7 million. Coupled with an estimated $116 million from overflight fees, the overall funding level for EAS would be approximately $364 million in FY22. If enacted into law, the White House plan would increase overall EAS funding by approximately $68 million. 

Small Community Air Service Development: The administration is not requesting funds for the Small Community Air Service Development Program in FY22.  Funding for the program has come from the AIP account in previous years. 

Unmanned Aircraft Systems

UAS Integration: The budget request includes $23.1 million to "safely integrate UAS into our Nation's busy airspace system." 

UAS Traffic Management System: The administration is requesting $59.3 million to "continue the development and deployment of the automated UAS Traffic Management system."  

UAS Research: The administration is also proposing $22 million from FAA's research account for UAS. According to budget documents that funding will be used, in part, to continue research "aimed at developing detect-and-avoid performance standards to enable beyond visual line of sight operations." 

Miscellaneous

NextGen: The administration's budget request includes $1 trillion for NextGen. 

Commercial Space: The FY22 budget request includes $3.7 million for "more staffing in the Office of Commercial Space Transportation to support the anticipated growth within the commercial space transportation industry." 

Community Noise Engagement: The administration is requesting $7.6 million "to increase the FAA's engagement with communities expressing concern over aircraft noise." 

Alternative Fuels: The administration's budget request includes $5 million "to support continuing research, analyses and tests leading to the replacement of leaded aviation gasoline with a high-octane safe unleaded alternative that reduces the impact of general aviation operations." 

Sustainable Aviation Fuel/Research: The White House is proposing $50 million to accelerate research "in the areas of sustainable fuels for jet engines, unleaded fuel alternatives for piston-engine aircraft, and low-noise/low-emissions aircraft technologies, including electric propulsion." 

Sustainable Aviation Fuel/Tax Credit: The administration calls for "a production tax credit of $1.50 per gallon for sustainable aviation fuel that achieves at least a 50 percent reduction in emissions relative to conventional jet fuel. The credit would be offered for fuel produced after December 31, 2021 and before January 1, 2028. A supplementary credit of up to $0.25 per gallon would be available on a sliding scale depending on the emissions reduction relative to conventional jet fuel. The emissions reduction certification amount would be $0.01 for every two percentage points above the 50 percent reduction baseline. Sustainable aviation fuel with a 50 percent emissions reduction relative to conventional fuel would receive a $1.50 per gallon credit, while fuel with a 100 percent emissions reduction would receive a $1.75 per gallon credit."

Related Information

• DOT Press Release. 
• DOT Budget in Brief Highlights. 
• DOT Budget Appendix. 

Department of Homeland Security

The administration is proposing a discretionary budget of $54.2 billion for the Department of Homeland Security in FY22, including funding for the Transportation Security Administration and U.S. Customs and Border Protection.  The request is essentially the same level that was provided in the final FY21 spending bill before accounting for the cancellation of $2 billion in prior-year border wall funding that remains unspent.  After factoring in those rescissions, proposed total funding for DHS is 4.1 percent below FY21.
 
Transportation Security Administration

The administration is proposing a total discretionary appropriation of $8.26 billion (excluding fees) to support TSA, which is $307 million above the FY21 enacted level.  This funding level does not assume any increase in the aviation passenger user fee as the previous administration repeatedly recommended.  After factoring out fees, TSA's net discretionary appropriations request is $5.9 billion.  

Law Enforcement Officer (LEO) Reimbursement Grants: The budget recommends $46.4 million for LEO reimbursement grants instead of proposing to shift these costs on to airports, like the previous administration had suggested.  

TSA Staffing of Exit Lanes: The budget does not shift the responsibility of monitoring exit lanes on to airports.   Instead, the budget retains statutory language that prohibits TSA from abrogating its responsibility to monitor airport exit lanes from the sterile area of the airport at those locations where TSA monitored them on December 1, 2013.     

Transportation Security Officers (TSOs): In total, the budget recommends $3.68 billion for TSO staffing but reduces the overall number of TSOs by 1,505 in FY22.  According to budget documents, TSA hiring was limited in 2020 as a result of the pandemic, and TSO staffing levels were subsequently reduced through natural attrition. While TSA has been increasing staffing levels in FY21, the agency predicts that passenger volume levels will be similar to what was experienced in 2018, which will necessitate a realignment of the number of full and part-time TSOs needed to handle this projected level.   

In addition, the budget recommends $47.6 million to provide TSOs with predictable, annual pay increases as well as other efforts to attract, build and inspire the workforce and $14 million to partially subsidize full-time health insurance benefit premiums for part-time TSOs, a practice that was discontinued in 2019.  

Insider Threat Program: The budget includes $27.1 million and 334 new positions to deter, detect, and mitigate insider threats from individuals that have access and/or insider knowledge that allows them to exploit vulnerabilities of the nation's transportation system with the intent to cause harm.  With this funding, select TSO staff will focus specifically  on mitigating the threat at airports nationwide.  Previously this had been a collateral duty.  The funding will also assist with developing "a more formalized and consolidated enterprise-wide approach to consistently address insider threat and risk matters." 

Aviation Passenger Security Fee: As a result of the COVID-19 pandemic and the significant decrease in passenger enplanements, TSA collected significant less in fee revenue in 2020 and 2021 to date than in previous years.  The agency currently projects that passenger volume will return to 2.2 million passengers daily — or to FY18 levels — in FY22.  Fee projections reflect collections at that level, and the budget does not propose to increase the aviation passenger security fee as the previous administration recommended.  

Checkpoint Property Screening System (CPSS): The budget proposes $104.5 million to procure and deploy 126 computed tomography (CT) systems to enhance the effectiveness of equipment used to screen carry-on baggage and to meet current and emerging threats.  Half of Checkpoint Property Screening System (CPSS) CT systems will be mid-sized, and half will be full-sized, although the quantity and configuration may change based on airport needs and final contract award pricing.   

Checked Baggage Reimbursements: The budget requests $30 million to reimburse airports for prior baggage system upgrades. 

Credential Authentication Technology (CAT): The budget requests $4 million to accelerate the purchase and deployment of 100 additional CAT-2 units (also known as CAT with camera) or to purchase 200 upgrade kits that will convert baseline CAT units already in the field to CAT-2s.  The CAT-2 systems utilize a matching algorithm that scans the traveler's photo on their identity document and takes a real-time photo of the traveler to verify their identity and to better detect fraudulent documents. 

Threats from Unmanned Aircraft Systems: In total, the budget requests $7.8 million to support TSA's counter unmanned aircraft systems (C-UAS) program, including the test bed at Miami International airport and 28 positions to lead the Federal response to a persistent disruption of airport operations from a UAS.   

Mobile Driver's License: The budget requests $4.25 million for a new mobile driver's license initiative.  Because TSA is not currently able to ingest data from or authenticate a digital identity, these funds will be used to conduct research, to develop ways to build out the agency's digital identity capability, and to pilot test CAT with a digital ID reader capability at multiple locations. 

Screening Partnership Program (SPP): The budget proposes $231 million for the 22 SPP airports, which is $4.5 million above than the amount provided in the final FY21 spending bill.   

Customs and Border Protection

In total, the administration is proposing $14.6 billion in net discretionary funding for CBP to strengthen border security, combat illicit drugs, and impede illegal border crossings, a decrease of $281 million from the FY21 enacted level. Notable items include:

CBP Officers: The budget fully funds all CBP officers in both FY21 and FY22 even though the agency has seen a significant decline in user fee revenues from international air and sea travel due to the COVID-19 pandemic.  Typically, these fees fund about 40-percent of CBP's officer cadre.  The budget does not request funding for additional CBP officers to screen people and goods entering the United States.   

Overtime: The per person overtime cap is $45,000 in FY22, consistent with prior years' limitations. 

Biometric Exit: The administration assumes remittance of $30 million in new fees for biometric exit.  Actual fee collections are 44 percent below original, pre-pandemic projections.  The FY22 level reflects the dramatic decline in collections from various visas that support this program. 

User Fees: Due to the impact of COVID-19, CBP user fee collections were "severely impacted."  These fees typically account for about one-third of CBP's annual funding and collection estimates have been greatly reduced for FY22.  In the final FY21 spending bill, Congress provided $840 million to offset the decline in two CBP user fees — the Immigration Inspection User Fee (IUF) and Consolidated Omnibus Budget Reconciliation Act (COBRA) fee.  In this budget request, CBP states it "will continue to monitor fee projections as real-world impacts of COVID-19 continue to evolve" but does not ask Congress for additional appropriations to offset this potential shortfall.   

Related Information

• DHS Press Release. 
• DHS Budget in Brief Highlights. 
• DHS Budget Appendix. 

Environmental Protection Agency
 
PFAS: As we indicated previously, the administration's FY22 budget request addresses pollution caused by Per- and Polyfluoroalkyl Substances (PFAS). Its discretionary request includes approximately $75 million "to accelerate toxicity studies and research to inform the regulatory development of designating PFAS as hazardous substances and setting enforceable limits for PFAS under the Safe Drinking Water Act." The proposed funding would also go towards "grants for technical assistance as State and local governments deal with PFAS contamination." 

Related Information

• EPA Press Release. 
• EPA Budget in Brief Highlights. 
• EPA Budget Appendix.