Crony Capitalism Update: How essential is essential air service?

Earlier this year, President Donald Trump sent his first budget proposal to Congress.  As you can imagine, there were some big differences between the Trump budget that lays out his spending priorities for the next fiscal year vs. some of the recent budgets sent to Congress from President Barack Obama.
One of the biggest differences included Trump’s plan to eliminate the U.S. Department of Transportation “Essential Air Service” or EAS program.  Essential Air Service provides government funding for flights to 159 communities in the U.S. that otherwise wouldn’t have regular air service.  Of those 159 communities, 44 are in Alaska, 2 in Hawaii and the rest in the mainland.  Five Minnesota communities receive taxpayer-subsidized service through the ESA.  These communities, along with the annual tax-payer subsidy they receive, are as follows:

  • Thief River Falls                        $3,537,794
  • International Falls                    $3,274,852
  • Chisholm/Hibbing                    $2,867,406
  • Brainerd                                    $1,658,672
  • Bemidji                                      $1,244,219

This most recent plan to eliminate the EAS taxpayer subsidy caught the attention of Brainerd, Minnesota officials who operate the airport and provide, via SkyWest Airlines, daily commercial flights from Brainerd to the Minneapolis/St. Paul airport.
With the government subsidy, you and I subsidize $57 dollars per ticket from Brainerd to MSP.  The average cost of a ticket today for that flight is $150.  The airplanes are designed to hold 50 passengers and on average, the Brainerd flights are 46 percent full – meaning that approximately $1,482 of taxpayer subsidized seats are empty on every flight.  Every day. The Brainerd airport director, Steve Wright, said recently that the commercial flights from the Brainerd airport passed the “50 percent load factor threshold for the first time” in March of this year.  Meaning that the taxpayer subsidization of empty seats to/from the Brainerd airport have been wasting a lot of money for quite some time.
The Bush Administration and several members of congress have tried unsuccessfully, for several decades, to eliminate federal funding for this wasteful program.  Instead, cuts are restored when congressmen intercede on behalf of their local businesses who have come to rely upon taxpayer subsidized air service into their communities.
Congress will have some big decisions to make in the coming weeks and months as they seek to put their imprint on the next budget and rein in runaway government spending.  If we can’t cut wasteful and unnecessary spending like EAS, it’s too late to drain the swamp – the swamp things will have already won.

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