The Federal Aviation Administration hasn’t explained why a small Minnesota airport is receiving nearly $18 million in federal funding under the recent COVID-19 aid package, far more than busier airports in Rochester and Duluth, for instance.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act includes $10 billion in funding for airports affected by pandemic. In Minnesota, 97 airports received a total of $158.37 million, the majority going to Minneapolis-Saint Paul International Airport. But Brainerd Lakes is set to receive more money than any other Minnesota airport after MSP.
In response to multiple inquiries from Minnesota Reformer about how the funds were allocated, FAA spokespeople said “all the available information” is posted on the agency’s website. The website doesn’t include records of how exactly grant totals were determined for each airport, however.
Other news outlets have brought attention to seemingly disproportionate grant awards for small airports and the FAA’s lack of response. Politico reported Monday that an “intentionally skewed formula and Congress telling the FAA to divide by zero” — referring to one of the financial calculations in the CARES Act airport funding — “are two of the reasons why some smaller airports got a disproportionate amount of money from the CARES Act, and the agency is now trying to square the numbers.”
CARES Act rollout has been plagued by a host of other issues. The first round of funding for the Paycheck Protection Program, which was intended to help small companies through low-interest loans, ran out in 13 days. Then the computer system for processing loan applications crashed just an hour after applications opened for the second round of funding.
Dozens of large companies received millions of dollars in loans from the program, The New York Times found, including the Los Angeles Lakers and the companies that run Potbelly Sandwich Shops and Shake Shack, all of which have announced they will return the loans.
And oversight for the sweeping law has been virtually nonexistent so far, after Trump removed the chairman picked to head a federal panel charged with monitoring his administration’s execution of the stimulus package.
The CARES Act airport funds are split between airports based on airport type and a few complex formulas, according to the FAA. Most of the funds — at least $7.4 billion — go to commercial airports under a formula based on an airport’s finances and how many passengers each airport served in 2018. Eight Minnesota airports appear eligible for these funds, based on FAA criteria.
Of the eight airports, four serve more passengers than Brainerd Lakes and received less funding. Rochester International Airport reported eight times more boardings than Brainerd Lakes in 2018 and received about one-tenth as much money, according to an analysis of FAA records. Another part of the formula is based on airport debt service and financial reserves; this calculation is equal for each of the eight airports, as they all reported no cash reserves, according to FAA filings.
Politico reported that this calculation is partly why some small airports were awarded so much money: the formula was “designed to favor smaller airports, after a rushed process in which a Senate-developed formula using factors other than size and traffic won out over a simpler House proposal.” The Senate is controlled by Republicans, who disproportionately come from less densely populated states with small airports.
“Another reason is part of that formula involves, in some cases, an impossible calculation: dividing by zero. The way the FAA handled that mathematical paradox led to a surprising bonanza for 56 airports, which were each handed $17.56 million simply because they had no debt but some level of cash reserves,” Politico reported.
This doesn’t explain Brainerd Lakes’ windfall, but whatever the method for handing out money, Brainerd Lakes came out way ahead.