Apr. 30, 2019

HARRISBURG – While officials at Pittsburgh International Airport (PIA) are preparing for a $1.1 billion modernization project, state lawmakers are raising concerns about gross mismanagement and conflicts of interest by members of the Allegheny County Airport Authority, which oversees both PIA and Allegheny County Airport. A bill aimed at restructuring the airport authority board was voted out of the House Local Government Committee on Monday, said Rep. Dan Moul (R-Adams), committee chairman.

“Several news reports and independent reviews have uncovered highly questionable practices by authority members, including members investing in a state subsidized airline that was under contract with the authority,” said Moul. “The airline accepted $3 million in state subsidies and a $1 million loan before declaring bankruptcy and leaving taxpayers on the hook, and it wasn’t the only airline to do so.

“Findings also show that the nine-member authority board failed in its oversight responsibilities when it delegated all authority to its CEO to pay out public money to airlines in exchange for service at Pittsburgh International Airport. No one should have unchecked power,” said Moul.

While authority members are required to be Pennsylvania residents, one member has failed to submit the required annual statements of financial interest, which would have proven he does not live here and therefore does not qualify to serve.

Allegheny County Airport Authority is the only Pennsylvania airport authority receiving state subsidies, and these benefits are substantial. It received $150 million in state gaming revenues in 2004 and has been receiving annual allotments of $12.4 million since 2017. In addition, the authority has received $31.4 million in PennDOT transportation funding and about $36 million in state economic and redevelopment grants since 2004, as well as nearly $9 million in low interest loans. By contrast, Philadelphia International Airport is totally self-supporting.

Since U.S. Airlines closed its Pittsburgh hub 14 years ago, PIT has focused on expansion of its domestic direct flights and international markets. In the last two years, it has ranked among the top airports in North America by J.D. Power and Associates and Travel and Leisure Magazine. In 2017, it was Air Transport World’s Airport of the Year – the first U.S. airport to receive the award.
Despite this success, the airport authority plans to demolish the U.S. Airways terminal, which is paid for and designed to handle 32 million passengers a year. Instead of trying to attract more business to the airport, the authority’s redevelopment plan would tear down an award-winning public asset and incur substantial debt while reducing opportunities to pay it off.

House Bill 1074, sponsored by House Speaker Mike Turzai (R-Allegheny), would change the structure of the governing boards at airport authorities in counties of the second class, beginning with how they are appointed. Currently, all members of the airport authority are selected by the County chief executive. Under Turzai’s bill, the terms of all current members would expire 60 days after the new law is enacted. Members could be reappointed, but the 13 new appointments would be made as follows: The governor, President pro tempore of the Senate and Speaker of the House and minority leaders in both chambers would each appoint one member to the board, and the county executive would appoint the remaining eight members.

Under the bill, all appointees, except the gubernatorial appointee, must be residents of the county where the authority is located and have expertise or substantial experience in budgeting, finance, economic development, aviation or airport operations. They would be limited to three consecutive terms on the board. At least seven members would constitute a quorum and at least seven affirmative votes – a simple majority – would be needed for board action.

“By adding legislative and gubernatorial appointments to these boards, it will help to ensure proper oversight and that state funding would be used in an appropriate and effective manner,” said Moul. “The current structure is insufficient to protect the interests of Pennsylvania taxpayers.”

House Bill 1074
was passed in committee by a 13-11 vote and now goes to the full House for consideration.

Representative Dan Moul
91st District
Pennsylvania House of Representatives

Media Contact: Donna Pinkham