The Brookings Report smartly highlights a glaring problem with airport infrastructure funding – it typically does not go where it can serve the most passengers. More than half of Airport Improvement Program (AIP) funds go to airports with little or no commercial service. In fact, they handle just 3 percent of passenger enplanements versus the 97 percent handled by large, medium and small hub airports. That math does not add up.

In light of this misallocation, it also doesn’t make sense to argue that the solution is to raise taxes. Increasing the Passenger Facility Charge (PFC) tax is not the answer to this inequity. More taxes without reform would simply result in higher ticket prices for airline passengers who are already overburdened with taxes that can total more than 20 percent of a ticket price.

The problem is not a lack of resources. As taxes have risen, airport revenues have skyrocketed by 50 percent since 2000, with near record-level revenues of $22 billion in 2011 (including PFC, AIP funds, airline rents/fees, interest and non-airlines rents and fees). Airports have nearly $10 billion in unrestricted cash and investments at their disposal. This is a spending issue, not a funding issue. What’s more, the current Congress considered and rejected a PFC cap increase in the recently enacted FAA Modernization and Reform Act of 2012.

The airlines recognize the role small airports play in their communities and their importance to them, but resources should be allocated based on legitimate need. All Americans would benefit from a more equitable distribution of the resources that are critical to keeping our nation’s airline industry competitive in a global marketplace. A more rational tax and regulatory burden on both passengers and airlines, as advocated by the National Airline Policy, would help accomplish that goal. The next Congress and Administration should look for ways to ensure these resources are sent where the people are.

The Brookings study shines an important light on a key fact: that a very few airports support a great percentage of this country's international traffic, even traffic that begins elsewhere. In an increasingly global economy we must make the best of this tremendous asset; our competitors are certainly doing so. Yet, we have a set of policies in this country that utterly fail to take this into account.

Happily, the Brookings study proposes two policy changes long championed by Airports Council International - North America that could make a big difference: making permanent the exclusion from alternative minimum tax of airport private purpose bonds and - most importantly - allowing airports to generate their own resources by removing artificial federal restraints on those airports.

In particular, this second tool is one that is used all over the world. Airlines and others like to point to places like Dubai and China and say they are investing in new facilities and we need to do the same. Yet, those places use exactly the tools that federal law prohibits here - a passenger user fee. In the United States, we largely rely in a system of government grants that is under severe pressure and the issuance of debt that can never be a long-term stand-alone strategy. The passenger user fee is severely limited, at the insistence of airlines who believe it gives airports too much control over their own future, and supported by the federal government, at least tacitly, which supports the current Washington-based system

So, I believe the Brookings study does a real service in pointing out the importance of our international gateways and the fact that current policies hold them back. I do not think doubling down on Washington is the answer. And I also think we need to keep in mind that we have a system of airports in this country. If anything, the federal involvement should be re-oriented, and airports need to be able use the same tools in use by our competitors all over the world. It will help our economy, our communities and, I would argue, our airlines. If we do this, our international gateway airports will be able to do their part to undergird our national competitiveness.

The Brookings report is a well-done analysis of the importance of international gateway airports to the U.S. economy. But its most visible recommendation—to allocate a larger share of federal airport grant money to major airports—will likely be dead on arrival, politically.

The Brookings analysts are correct in finding that the current AIP grant program represents a huge cross-subsidy. The money comes from the Aviation Trust Fund, and the largest source of that money is airline passenger ticket taxes and segment fees. Passengers using large hub airports constitute 70% of all US airline passengers, and hence generate 70% of the ticket taxes. But large hubs get only 12% of AIP grant money. By contrast, small hubs and non-hubs account for 11% of passengers and ticket tax money, but those airports get 34% of AIP grants. And reliever and GA airports, generating no ticket tax revenues, get 21% of AIP grants.

But to raise alarms about this is to mistake a feature for a bug. AIP was designed to cross-subsidize small airports. Congress absolutely loves the program for the opportunity it gives just about every member to deliver AIP grants to at least one airport in his district. And that is unlikely to change.

A far better approach would be for Congress to allow at least large and medium hubs to “graduate” from AIP altogether. Sure, it’s unjust for their passengers to pay ticket taxes to support other people’s airports. But large and medium hubs could get by without AIP grants—if only they could replace them with higher local Passenger Facility Fees. Last year a group of large hub airport owners representing 19 commercial airports told the Super Committee that they would be willing to give up all AIP entitlement grants if Congress would lift the federal “cap” on PFCs to at least $7.50 (from the current $4.50 set in 2000). In a position paper accompanying this letter, they estimated that if all 65 large and medium hubs gave up both discretionary and entitlement grants, the 10-year savings would be around $1.1 billion per year. If large, medium, small, and non-hub airports all did that—in exchange for removing the PFC cap altogether—the budget savings would amount to 65% of AIP’s current $3.37 billion per year—saving $2.19 billion a year.

Since the most likely impact of Sequestration on the FAA will be to gut its capital investment account (Facilities & Equipment) so as to avoid cutbacks in air traffic control operations, saving over $2 billion per year on AIP would provide a huge boost to NextGen funding. Without something as dramatic as this change, FAA budget cuts will push NextGen further and further into the future.

Airlines have always opposed PFCs. But the time has come for them to reconsider. Graduating commercial airports from AIP could rescue NextGen from the death of a thousand cuts.

There is a simple answer to this week’s question: Federal taxpayers should not be required to support any aviation activity not directly related to defense.

Aviation users are better off than most people and should be able to manage their travel without federal subsidy.

The Federal government has a particularly poor record in this sector. Air traffic control needs to be upgraded, but government procedures are so slow that recommendations for reform tend to be outdated as soon as they are eventually agreed. In Canada, on the other hand, a privatized ATC system functions well, being paid for and managed by commercial airlines, which, in their turn, are paid by their customers.

If there are situations where subsidies to civilian aviation are justified, payments should be made by local or state governments closer to the problems, not by a federal administration which, incidentally, has ran out of other people’s money to spend.