Breaking Down the Budget – A Business Travel Perspective Part II

On Friday, we wrote about what President Obama’s proposed 2015 budget means for business travel. Here is a closer look at the four things that are good for business travel and four things that are bad for business travel in the proposed budget – and what they really mean. We’ll start with the positives, albeit they are much harder to find than the negatives.

POSITIVES:

1. No Arbitrary Cuts in Government Travel Spend
   On its face, this is good for the travel industry and demonstrates an understanding that face-to-face meetings are valuable for getting business done for our government. The truth of the matter, however, is that the federal travel budget has already been slashed so many times, there is not much more room to cut.
2. Increase Global Entry Funding From $51 to $61 Million
   Global Entry is an automated customs clearance program offered by U.S. Customs and Border Protection that allows expedited clearance for pre-approved, low-risk travelers upon arrival in the United States. GBTA views Global Entry as a success story for U.S. Customs and Border Protection and business travelers. Low-risk, high-frequency international business travelers are the perfect fit for quick, secure customs clearance on arrival at U.S. airports and at preclearance airports. This translates into one less travel hassle for these busy road warriors and one more win for the nation’s economy.
3. Increase U.S. Customs and Border Protection (CBP) Staff to 25,775 Officers – 975 More Than in Fiscal Year 2014
   More CBP staff means educed wait times and transaction costs for cross-border travel and trade. Less time waiting means more time to get business done.
4. For the Northeast Corridor, the Budget Requests $550 million to Bring Infrastructure and Equipment Into a State of Good Repair to Enable Future Growth and Service Improvements
   Having recently rode Amtrak from our nation’s capital to New York City, I can say we are pleased to see this request included in the budget.

NEGATIVES:

1. Increased Aviation Fee New Surcharge for Air Traffic Services of $100 Per Flight
   While this is a fee is levied on the airlines, it inevitably will get passed on to passengers meaning frequent travelers especially will take on a heavier cost burden.
2. TSA’s Request Includes Two Proposals to Increase Revenue Collections by 
$615 Million Through Increasing the Aviation Passenger Security Fee and Continuing to Collect the Air Carrier Fee. The Passenger Fee Proposal Adjusts the Fee from $5.60 Per One-Way Trip to $6.00 Per One-Way Trip
   They call it a fee, but let’s just call it what it is – another tax. There is already a 20 percent tax burden on an average $300 round-trip airfare – which increases travel costs for U.S. businesses and decreases travel demand. Another tax increase is not the answer; more efficient, less costly, risk-based screening programs and tighter fiscal controls are the answer.
3. Cut in Next Gen Funding: The Budget Requests $774 Million for NextGen – A Decrease of $54 Million Below Fiscal Year 2014 Enacted Levels
   Based on 1940’s era radar, the nation’s air traffic control (ATC) system is inefficient and slow. In the next few years, more passengers and aircraft will flood an already overloaded system. Flight and airport delays cost business travelers time and money, and result in lost business opportunities and cancelled meetings. NextGen is comprehensive ATC modernization using a Global Positioning System (GPS) built on reliable satellite-based navigation. GPS and other sophisticated technologies and flight procedures reduce flight delays, flight times and aircraft fuel burn and emissions. Full NextGen funding is essential and should not be reduced. Accelerating NextGen means business travelers will see fewer flight delays in the next few years, rather than ten years from now.
4. Increase the PFC Limit From $4.50 to $8.00 for All Commercial Service Airports
   And yet another tax proposed.

As we have stated, the proposed budget raises a number of serious concerns and would actually hamper business growth and thus hinder the overall economy.  We all pay when policy makers take a short-sighted approach that raises the cost of business travel.