Congress last month once again extended the FAA’s current authorization and aviation taxes until December 14, making it increasingly unlikely that the question of how to pay for operating the FAA and simultaneously modernizing the entire air traffic system will be settled anytime soon.
Fuel taxes in the United States
The Senate Finance Committee has approved a bill that would repeal the onerous “fuel fraud” provision enacted into law as part of the 2005 Highway Bill. Although the law dealt with surface transportation, it contained a provision that aviation jet fuel taxes be collected at the highway diesel fuel rate of 24.4 cents per gallon as opposed to the aviation rate of 21.9 cents per gallon.
General aviation late last week won a major battle, but not yet the entire war, against user fees. The House of Representatives last Thursday approved H.R.2881, the FAA Reauthorization Act of 2007, and the next morning the Senate Finance Committee drastically modified the tax provisions in its companion bill, S.1300.
The House of Representatives this afternoon approved an FAA reauthorization bill that raises the tax on jet-A from 21.8 to 35.9 cents a gallon and the tax on avgas from 19.3 to 24.1 cents a gallon. To the relief of general aviation, it contains no user fees and no concessions to the airlines. The airline taxes–including 7.5 percent on tickets and 4.3 cents a gallon on jet fuel–will remain at existing levels.
The House Ways and Means Committee today passed H.R.3539, a tax code modification companion bill to H.R.2881, the House FAA reauthorization legislation. In a victory for general aviation groups, the committee voted to keep airline taxes, including the airline fuel tax, at existing levels. Under the legislation, avgas taxes would increase from 19.3 to 24.1 cents per gallon and the jet-A tax would rise from 21.8 to 35.9 cents per gallon.
With stark differences between House and Senate versions of FAA reauthorization bills working their way through Congress, some industry and congressional insiders see little chance of an agreement before September 30, the day when current taxes and fees that support the FAA expire.
The Senate last week passed the Surface Transportation Reauthorization Act (the “Highway Bill”), which authorizes surface transportation spending through fiscal year 2009. The legislation includes two provisions that could affect business aviation if signed into law, according to NBAA.
Corporate aviation took flak on FAA funding proposals this morning as the architects of S.1300, the Senate FAA financing bill that includes a $25 user fee for most flights, made it clear they want business aircraft users to pay more toward ATC modernization. “I don’t want to create a system where airline passengers subsidize corporate jets,” said Sen. Jay Rockefeller (D-W.Va.), chairman of the senate aviation subcommittee.
The House Transportation Committee’s attempt at an FAA reauthorization and funding bill has received praise and backing from general aviation interests, but they warn that the fight for passage without user fees is far from over.
General aviation and its allies continued the political infighting with the airline lobby over user fees last month, firing salvos at an Air Transport Association (ATA) airport-shown television ad that portrayed GA–especially business jets–as the culprits behind airline delays.