Time runs short for Congress to agree on FAA funding plan

 - August 29, 2007, 5:12 AM

With Congress out of town for its “summer district work period,” there was little action on the FAA’s reauthorization bill, and the nagging question of how to fund the agency for the next four years hung over the legislature as the September 30 deadline loomed.

Lawmakers departed early last month for a 25-day hiatus, but the rhetoric between the nation’s airlines and general aviation over user fees continued apace.

On August 14, NBC ran a segment on its Nightly News in which it reported that the increase in airline delays at New York’s three major airports was attributable largely to the proliferation of regional jets, although it also reported that the airlines blame the congestion on “too many private jets.”

While Air Transport Association (ATA) president James May said on the broadcast that the congestion is not a function of the number of runways available, travel industry analyst Steve Danishek begged to differ. “We are maxing out the airports’ ability to land and take off aircraft,” he said.

NBC did not have a representative of general aviation on the program to respond to ATA’s allegation that the congestion is caused by too many private jets, but the next day AOPA quoted Steve Brown, the former FAA associate administrator of air traffic services, as saying “That’s a red herring.”

Now NBAA senior v-p of operations and administration, Brown countered that corporate jets using Teterboro, Westchester County and other New York-area airports fly routes below, above and around the airline operations into the three New York hub airports.

No Funding Plan in Place
The battle lines between the big airlines and GA were clearly drawn earlier this summer when GA interests enthusiastically backed a bill adopted by the House Transportation and Infrastructure Committee (H.R.2881). That bill called for a modest increase in the fuel taxes general aviation operators pay.

The airlines, meanwhile, gave their support to a Senate bill (S.1300) that would impose a $25-per-flight-segment surcharge for turbine aircraft. That fee would support ATC modernization. The Senate plan would also raise the jet-fuel tax from 21.8 cents per gallon to 49 cents a gallon. The tax on aviation gasoline would remain 19.3 cents a gallon.

Before Congress left Washington, the four top members of the House transportation and aviation subcommittees went before the House Ways and Means Committee to urge that tax-writing committee to keep aviation excise taxes (fuel taxes) and reject user fees.

While the Transportation Committee sets the overall policy and spending limits for the FAA, the Ways and Means Committee sets specific taxes to fund ATC modernization, airports improvements and FAA operations.

“We have come together on a strong and effective bill,” said Transportation and Infrastructure Committee chairman James Oberstar (D-Minn.). “It provides an historic $68 billion for the needs of aviation over the next four years.” He was accompanied by Rep. John Mica (R-Fla.), ranking Republican on the full Transportation Committee, aviation subcommittee chairman Jerry Costello (D-Ill.) and subcommittee ranking member Rep. Tom Petri (R-Wis.).

Oberstar said that the Transportation Committee believed that general aviation interests should pay a “little bit more than they have in the past” and that the GA fuel tax increase recommended to the Ways and Means Committee was “right and fair.”

Mica said, “The problem with a user-fee system is that it is difficult to apply, particularly to general aviation. That’s why Mr. Oberstar and I agreed that we would increase some of the fuel taxes that [general aviation] pays, but we’re not being oppressive.”

Oberstar and Mica noted that the existing excise tax system and the tax rates they were recommending in H.R.2881 would fund current FAA needs and pay for the Next Generation Air Transportation System (NextGen). Mica said that NextGen could be funded with a limited increase in taxes and “the user would pay on a reasonable basis.”

The members of the Transportation Committee took issue with the latest tax proposal floated by the airlines in testimony before the Senate Finance Committee, that chamber’s tax-writing panel.

At a hearing in July, Delta Air Lines COO James Whitehurst, speaking for the ATA, proposed a new ticket tax that would include a fixed departure tax per passenger, plus a per-passenger tax based on distance traveled. “It’s not a user fee,” he contended.

“What you have come up with is certainly worth considering,” said Sen. Trent Lott (R-Miss.) of the ATA passenger ticket tax. “It would mean you would pay a little less than under the current system, but the formula is adjustable.”

But Oberstar told the House Ways and Means Committee, “I do not believe that airlines, or more accurately, airline passengers, should pay less than what they are now paying.” Airline passengers now pay a 7.5-percent tax on their tickets.

Lott and Sen. John Rockefeller (D-W. Va.), who co-authored S.1300, have demanded that business aircraft operators pay more toward ATC modernization.

In February the Bush Administration proposed a plan that would have more than tripled GA fuel taxes–from 21.8 cents a gallon to 70 cents a gallon on jet fuel and from 19.3 cents to 70 cents a gallon on avgas. It would also have increased the fuel tax on airlines, fractionals and on-demand charters from 4.3 cents per gallon to 13.6 cents per gallon.

“We heard from all of the stakeholders and came to the bipartisan conclusion that instead of radically changing the system, we should stay in the current [funding] system and look at what is fair,” said Costello. “The best way to do that is to index the [fuel] tax for inflation, and then it would generate more money than the administration’s proposal.”