NBAA Convention News

FAA funding still a hot topic

 - September 30, 2008, 7:53 AM

As the presidential election enters the home stretch, still looming is the thorny question of reauthorizing FAA funding for the next four years and the even thornier question of user fees.

The agency has been operating on funding and program extensions for the past year, when the House of Representatives on Sept. 30, 2007, passed the “Next Generation Air Transportation System Financing Reform Act of 2007” (H.R.2881), by a vote of 267 to 151.

Throughout the summer, the Air Transport Association (ATA), which lobbies for the nation’s airlines, blamed a surge in corporate jet and small general aviation traffic for bottlenecks throughout the National Airspace System. The ATA and the Bush Administration want Congress to finance the FAA and ATC modernization through a series of user fees, a method business aviation interests strongly oppose.

The House sent a resounding “no” to the airlines and the White House when it passed H.R.2881. The bill contained no new user fees and no concessions to the airlines, but it did modestly increase the taxes on jet-A and avgas.

The Senate version of FAA reauthorization went through several iterations before being placed on an indefinite hold this summer. Meanwhile, Congress extended aviation funding and taxes five times since they initially expired last fall.

The Senate bill, the “Aviation Investment and Modernization Act of 2007” (S.1300), originally contained a $25-per-flight fee on jets and most turboprops when it was introduced by the Senate Committee on Commerce, Science and Transportation in May. That was later removed during negotiations between that committee and the Senate Finance Committee.

Like the House’s H.R.2881, the Senate bill calls for modest tax increases on jet fuel but does not increase the taxes on aviation gasoline. All other existing passenger ticket taxes, segment fees and cargo waybill taxes would remain intact, and no new user fees are included.

Over the course of the summer, general aviation leaders and others expressed varying degrees of disappointment with the Senate maneuvering and urged the body to continue an attempt to reach agreement.

“Given the importance of air transportation to our nation’s economy and citizens’ quality of life, we hope the Senate will recommit itself to passing an FAA reauthorization bill this year,” NBAA president and CEO Ed Bolen said early this summer.

But in June, Congress passed another 90-day extension to September 30. With that latest extension of FAA programs and authority to collect taxes, many congressional observers began predicting that Congress would pass one more extension, this time for a full year so that the next president will be able to have an imprint in new FAA reauthorization.

Recent reports indicated that the House was warming to a Senate plan to extend the current FAA reauthorization through the fall of next year. But that could threaten the funding compromise on user fees because unenacted bills will die at the end of this session of Congress. Lawmakers would then have to start from scratch next year.

Public Relations Battle Intensifies

While the FAA reauthorization bill was wending its way through the Senate, the ATA continued to paint GA as the villain in air traffic congestion. The group blamed general aviation for clogging the airways and causing backups on the ground.

The airlines claimed in an e-mail to passengers that the overwhelming majority of jets in the skies over Kentucky during the Derby events in May were private jets.

“Many of us watched the winner’s circle celebrations on television while others flew on luxurious private jets to watch in person,” the e-mail said. “Did you know that airline passengers were subsidizing these posh trips to the race?”

That claim was pure nonsense, countered NBAA. “The ATA’s suggestion that GA air traffic at a well-planned weekend event in a single location was somehow problematic is simply laughable,” said Bolen. “The fact is, delays are caused by the airlines over-scheduling flights 365 days a year at big-city airports all across the country.”

He said a Transportation Department official provided a clear example of the airlines’ overscheduling practices to Congress by pointing to one airline that slotted “56 departures in a 15-minute window at the Minneapolis-St. Paul Airport, about three times the number of airplanes that the airport has the capacity to handle.”

The ATA said in its e-mail that the airlines and their passengers paid more than 90 percent of the costs of running the ATC system but accounted for only 66 percent
of system operations. “Business jets, however, underpaid for the air traffic control services they used by nearly $1 billion,” the airline group said.

According to the ATA, private jet owners have lobbied hard to protect their tax advantages. “The recreational piston-engine (or ‘general aviation’) community has been ginned up by the jetsetters to oppose the small fees proposed, even though those fees would not be imposed on piston aircraft under any proposal Congress is considering,” the ATA argued.  

The association further contended that business jet users spend a small fortune flying their lavish jets to Kentucky, buying expensive tickets to the Kentucky Derby and attending swanky parties but protest that they cannot pay a $25 fee to help modernize the ATC system.

Bolen said it is disingenuous for the airlines to suggest that general aviation won’t contribute to aviation system modernization, when the GA community supports legislation that contains a 65-percent fuel tax increase on GA to help fund the FAA and transform the aviation system.

Although the Senate Finance and Commerce committees eventually agreed in principle that no new user fees would be levied on general aviation, the Senate Appropriations aviation subcommittee took the matter a step further.

Just before Congress left for its annual summer vacation in August, the Senate Appropriations subcommittee inserted language that would prohibit spending any money on implementing user fees. But that doesn’t remove the threat of user fees because funding for the FAA is a two-part process. It takes both an authorizing bill and appropriations bill.