Funding Source Change in the Wind at FAA
On Tuesday, FAA Administrator Marion Blakey testified before the Senate subcommittee on aviation about the financial health of the agency, specifically the FY 2007 budget and condition of the aviation trust fund. The FAA chief said low airline fares, while great for the consumer, "spell trouble for the trust fund with its heavy reliance on the [7.5 percent] ticket tax as its primary source of revenue," which she estimated at 50 percent of trust-fund revenues. "This approach will not sustain us into the future." Raising the specter of user fees, higher fuel taxes and/or another funding scheme, Blakey said, "Tying funding to the cost of providing service protects both FAA and the customers who use FAA services by not subjecting our ability to provide a certain level of service to unrelated factors like ticket prices. A stable, cost-based revenue stream can also ensure funding for long-term capital needs." Blakey concluded, "Our proposal for funding reform is now under review within the Administration. It will propose a cost-based funding structure [with details to] come soon in the form of a legislative proposal."