Seven Montana communities face loss of subsidies for air service

More than 100 rural communities, including seven in Montana, would have to start paying for federally subsidized air service next year or risk losing it altogether under a budget proposal from President Bush.

By LEDYARD KING and FAITH BREMNER
Gannett News Service

Bush’s plan would slash funding for the Essential Air Service program by more than half, from $113 million to $50 million.

How much each city would have to pay an airline to keep service has yet to be determined. Every community would have to pay at least 10 percent of the current cost and some might have to cover the entire amount. The government would most help those areas farthest away from a medium-sized or large hub airport.

The proposal already is running into turbulence on Capitol Hill. Lawmakers, who shot down a similar budget cut two years ago, say many of these cash-strapped towns simply cannot afford more expenses.

"If the communities could afford to pay, they wouldn’t need essential air service," said Montana’s lone House member, Rep. Denny Rehberg, R-Mont., who vowed to fight the proposal.

"If you look at history, the West was settled through subsidies. We never could have built the highway system without them and it’s something that everybody benefits from," Rehberg said.

If Bush gets his way, Glasgow, Glendive, Havre, Lewistown, Miles City, Sidney and Wolf Point would each have to fork over at least $70,000 to hang onto their federal subsidy. That amounts to 10 percent of the $707,000 the federal government pays Big Sky Airlines every year to serve each of their airports.

Havre and Hill County, which jointly own the Havre airport, would have a hard time coming up with the $70,000 because of the state cap on property taxes, city Finance Director Lowell Swenson said.

"It would, in all likelihood, require cutting somewhere else," Swenson said, noting that $70,000 is about what it would cost to pay two police officers’ annual salaries.

The airport doesn’t have the money, either, he said. Its entire annual budget is about $60,000, one-third of which goes toward paying off airport improvement project loans.

"We’ve got a small operating budget. Any increase will be considerable," he said.

Essential air service began in 1978 to make sure money-losing flights would continue to serve isolated towns after air service was deregulated. The program, which helps 125 communities from Hawaii to Maine, pays airlines to fly into small airports they normally would avoid because of few passengers and high costs.

But the administration says the program is spiraling out of financial control. For example, until last year, CommutAir received a $1.1 million federal subsidy annually to fly to Utica, N.Y., even though it served fewer than four people a day.

The subsidy amounted to $495 per passenger, according to the federal budget. Federal officials canceled the subsidy last year.

Under the Bush proposal, all communities receiving aid will be ranked based on their distance from a larger airport and their willingness to match a portion of the subsidy. Communities more than 210 miles from a medium-size or large airport would have to cover 10 percent of the cost. Communities that are closer to bigger airports would have to contribute 25 percent.

Communities now pay nothing for the service. Those unwilling to kick in at least 10 percent of the cost of air service would be dropped from the program.

Examples of large hub airports include LaGuardia in New York City and O’Hare in Chicago. Medium hub airports include Albuquerque, N.M., Cleveland and El Paso, Texas.

Aid would be distributed first to the most isolated communities, until the money runs out. That means communities closest to larger airports could end up with nothing even if they’re willing to pay their share of the subsidy.

Bill Mosley, a spokesman for the Department of Transportation, said the administration wants to move away from a "one-size-fits-all" program by making subsidies available for other forms of transportation. For example, communities could use their subsidy for bus service instead.

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