I’m going skiing in Vermont next month for a few days. As always, I’ll toss my stuff into the car and drive, but there is a government-subsidized alternative.
For about $159 each way, I could fly from Westchester County Airport in suburban New York to Lebanon, N.H., which is about 20 minutes from my Vermont lodgings. The flight itself would last about an hour and twenty minutes. Including time to get to the airport, get off the plane and rent a car, the whole trip would take around four hours.
That means I can save a total of about 15 minutes by flying rather than driving, assuming the flight actually leaves on time.
Yet, according to the U.S. government, the ability to fly from Westchester to Lebanon is essential. It is also essential to have flights between Lebanon and Boston, which is just a two-hour drive away (a drive that goes directly past a good-sized airport in Manchester, N.H.), and from various other regional centers around the country to tiny airports in 152 communities.
Since airline deregulation in 1978, the Essential Air Service (EAS) program has funneled federal dollars to airlines that serve remote locations. In the days of regulation, the government ensured service to these locations by fiat, but, when it granted airlines more freedom to fly to more places, it gave up the right to insist that they serve tiny, uneconomic destinations. So the government got into the business of providing subsidies instead. These subsidies cost taxpayers around $200 million a year.
Supporters of EAS everywhere from Scottsbluff, Neb. (pop. 14,732) to Kake, Alaska (pop. 710) united in defense of the program last week after Sen. John McCain, R-Ariz., proposed an amendment to eliminate it. “A lot of Americans on Nov. 2 said they wanted us to stop spending [on] things that are not absolutely essential,” McCain said. “Although this program is called the Essential Air Service, in my view it’s far from essential.” McCain acknowledged that $200 million won’t do much to reduce the federal deficit but added, “it might be nice to start somewhere.”
We all agree that fiscal responsibility should start “somewhere,” but we usually mean “somewhere else.”
Sen. Charles E. Schumer, D-N.Y., issued a typical defense of EAS, which supports service to six airports in New York. “There is no question about it,” he said. “Access to air travel is good for businesses, good for jobs, and good for the financial health of the community.” In other words, it’s good for incumbents trying to keep their constituents happy.
In terms of driving time, four of the communities Schumer is concerned about — Massena, Plattsburgh, Ogdenburg and Saranac Lake — are about as close to the large Canadian airports at Montreal and Ottawa as Stamford, Conn., is to John F. Kennedy International Airport in New York. Jamestown, N.Y., is within easy driving range of Buffalo’s moderate-sized airport, and not all that far from Cleveland or Toronto; and Watertown, N.Y., is in driving range of Syracuse. It would not be difficult to get to these small places without EAS.
Communities in the western states that are served by the program are a bit farther afield, including such vital economic centers as Show Low, Ariz., and Wolf Point, Mont. The 7,700 souls who call Show Low home face a 175-mile drive to Phoenix to reach the nearest major airport. Wolf Point, a community of less than 3,000, is about 200 miles from the Canadian city of Regina, Sask., population 180,000, which has direct service to American cities including Chicago, Denver and Minneapolis. It costs $1.4 million a year to subsidize the service to Show Low and a $1 million a year to run a 19-seat Beechcraft turboprop between Wolf Point and Billings, Mont.
Of the 152 communities served by EAS, the only ones that seem to truly depend on the service are the 45 or so in Alaska. There are no Interstate highways in Alaska and the highways the state does have are fairly limited. Amtrak does not go to Alaska. The Alaska Railroad only runs passenger trains between May and September, and connects only a few communities. Air travel is therefore the only way to reach much of the state, and only a few Alaskan cities are large enough to have any chance of supporting unsubsidized air service on their own.
Without subsidies, these communities might be genuinely cut off. The mayor of Kake, Henrich Kadake Sr., told the Juneau Empire that many people in his area live on fixed incomes and would be unable to travel, even in cases of family emergencies, without affordable air service.
But, for the Lower 48, it’s more a matter of convenience than necessity. Yes, driving an hour or two to get to an airport may be annoying at times, but it is not impossible, or even a particular hardship for people who live in rural areas. As a young adult in Montana, I thought nothing about driving 90 miles to go to the movies.
Avoiding occasional annoyances is not a national priority. As I have written before in the case of rural telephone subsidies, each area has its pros and cons, and it is not the role of the government to even out every cost.
Scotts Bluff County Airport Authority Chairman Don Overman told The Nebraska Rural Radio Association that a state senator had assured him the western Nebraska airport has nothing to worry about. Unfortunately, that’s probably true. Compared to the monstrosity of the federal deficit, $200 million is negligible. Politically, it’s not worth upsetting anyone over. The same is true of every other unnecessary $10 million, $200 million or $500 million program.
Programs like EAS may be chump change, but as long as the chumps keep forking over the change, we’ll never be able to say that our budget is truly under control.
Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book,
The High Achiever’s Guide To Wealth. His contributions include Chapter 1, “Anyone Can Achieve Wealth,” and Chapter 19, “Assisting Aging Parents.” Larry was also among the authors of the firm’s previous book
Looking Ahead: Life, Family, Wealth and Business After 55.
Posted by Larry M. Elkin, CPA, CFP®
I’m going skiing in Vermont next month for a few days. As always, I’ll toss my stuff into the car and drive, but there is a government-subsidized alternative.
For about $159 each way, I could fly from Westchester County Airport in suburban New York to Lebanon, N.H., which is about 20 minutes from my Vermont lodgings. The flight itself would last about an hour and twenty minutes. Including time to get to the airport, get off the plane and rent a car, the whole trip would take around four hours.
That means I can save a total of about 15 minutes by flying rather than driving, assuming the flight actually leaves on time.
Yet, according to the U.S. government, the ability to fly from Westchester to Lebanon is essential. It is also essential to have flights between Lebanon and Boston, which is just a two-hour drive away (a drive that goes directly past a good-sized airport in Manchester, N.H.), and from various other regional centers around the country to tiny airports in 152 communities.
Since airline deregulation in 1978, the Essential Air Service (EAS) program has funneled federal dollars to airlines that serve remote locations. In the days of regulation, the government ensured service to these locations by fiat, but, when it granted airlines more freedom to fly to more places, it gave up the right to insist that they serve tiny, uneconomic destinations. So the government got into the business of providing subsidies instead. These subsidies cost taxpayers around $200 million a year.
Supporters of EAS everywhere from Scottsbluff, Neb. (pop. 14,732) to Kake, Alaska (pop. 710) united in defense of the program last week after Sen. John McCain, R-Ariz., proposed an amendment to eliminate it. “A lot of Americans on Nov. 2 said they wanted us to stop spending [on] things that are not absolutely essential,” McCain said. “Although this program is called the Essential Air Service, in my view it’s far from essential.” McCain acknowledged that $200 million won’t do much to reduce the federal deficit but added, “it might be nice to start somewhere.”
We all agree that fiscal responsibility should start “somewhere,” but we usually mean “somewhere else.”
Sen. Charles E. Schumer, D-N.Y., issued a typical defense of EAS, which supports service to six airports in New York. “There is no question about it,” he said. “Access to air travel is good for businesses, good for jobs, and good for the financial health of the community.” In other words, it’s good for incumbents trying to keep their constituents happy.
In terms of driving time, four of the communities Schumer is concerned about — Massena, Plattsburgh, Ogdenburg and Saranac Lake — are about as close to the large Canadian airports at Montreal and Ottawa as Stamford, Conn., is to John F. Kennedy International Airport in New York. Jamestown, N.Y., is within easy driving range of Buffalo’s moderate-sized airport, and not all that far from Cleveland or Toronto; and Watertown, N.Y., is in driving range of Syracuse. It would not be difficult to get to these small places without EAS.
Communities in the western states that are served by the program are a bit farther afield, including such vital economic centers as Show Low, Ariz., and Wolf Point, Mont. The 7,700 souls who call Show Low home face a 175-mile drive to Phoenix to reach the nearest major airport. Wolf Point, a community of less than 3,000, is about 200 miles from the Canadian city of Regina, Sask., population 180,000, which has direct service to American cities including Chicago, Denver and Minneapolis. It costs $1.4 million a year to subsidize the service to Show Low and a $1 million a year to run a 19-seat Beechcraft turboprop between Wolf Point and Billings, Mont.
Of the 152 communities served by EAS, the only ones that seem to truly depend on the service are the 45 or so in Alaska. There are no Interstate highways in Alaska and the highways the state does have are fairly limited. Amtrak does not go to Alaska. The Alaska Railroad only runs passenger trains between May and September, and connects only a few communities. Air travel is therefore the only way to reach much of the state, and only a few Alaskan cities are large enough to have any chance of supporting unsubsidized air service on their own.
Without subsidies, these communities might be genuinely cut off. The mayor of Kake, Henrich Kadake Sr., told the Juneau Empire that many people in his area live on fixed incomes and would be unable to travel, even in cases of family emergencies, without affordable air service.
But, for the Lower 48, it’s more a matter of convenience than necessity. Yes, driving an hour or two to get to an airport may be annoying at times, but it is not impossible, or even a particular hardship for people who live in rural areas. As a young adult in Montana, I thought nothing about driving 90 miles to go to the movies.
Avoiding occasional annoyances is not a national priority. As I have written before in the case of rural telephone subsidies, each area has its pros and cons, and it is not the role of the government to even out every cost.
Scotts Bluff County Airport Authority Chairman Don Overman told The Nebraska Rural Radio Association that a state senator had assured him the western Nebraska airport has nothing to worry about. Unfortunately, that’s probably true. Compared to the monstrosity of the federal deficit, $200 million is negligible. Politically, it’s not worth upsetting anyone over. The same is true of every other unnecessary $10 million, $200 million or $500 million program.
Programs like EAS may be chump change, but as long as the chumps keep forking over the change, we’ll never be able to say that our budget is truly under control.
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