Despite heavy lobbying by general aviation groups, a promising effort to have the concept of user fees for ATC services stricken from the Senate’s version of an FAA reauthorization bill failed narrowly in mid-May by a 12-11 vote.
Fuel taxes in the United States
Sen. John Rockefeller IV (D-W.Va.), chairman of the Senate aviation subcommittee, and ranking member Sen. Trent Lott (R-Miss.) are expected to introduce an FAA reauthorization bill this week to counter one the Bush Administration released in February.
FAA Administrator Marion Blakey continued her pitch for a new revenue stream for her agency during a speech at the U.S. Chamber of Commerce early last month, comparing a Gulfstream IV flying from Teterboro Airport (TEB) to the Tampa, Fla. area to an airliner operating between New York La Guardia Airport and Miami. The FAA’s own N1–in which the Administrator often travels–is a GIV.
A provision in the legislation to reauthorize the nation’s surface transportation programs, known as the Highway Bill, would “drastically alter the way the taxes on jet fuel are collected,” according to the National Air Transportation Association. Under the proposal, jet fuel would be taxed at the same 24.4-cent-per-gallon rate as diesel fuel.
NBAA and the National Air Transportation Association are creating a joint working group to address the fuel tax provisions of the Highway Bill that was signed by the President earlier this month. “Of particular concern is that taxes on jet fuel will be assessed at the diesel fuel rate [24.4 cents per gallon instead of the 21.9-cent per-gallon jet fuel rate] and deposited into the Highway Trust Fund,” NBAA said.
Ed Bolen, president of the National Business Aviation Association, described the recently released FAA funding proposal as “one of the greatest threats business aviation has ever faced.” According to Matthew Zuccaro, president of HAI, it is an even bigger threat to the helicopter industry.
General aviation’s concerns found a firm basis last month when the FAA presented a reauthorization proposal that includes a more than 300-percent hike in the fuel tax and myriad fees for obtaining a pilot’s license, registering an airplane or receiving a medical.
With one congressman calling it “dead on arrival,” the FAA yesterday released its new proposal for financing the agency over the next 10 years, a plan that would more than triple general aviation fuel taxes, from 21.8 cents per gallon to 70 cents per gallon, and create a mishmash of new and/or higher fees for such things as pilot licensing, aircraft certifications and other services.
Business aviation groups welcomed a letter from the FAA assistant administrator for aviation policy to the commissioner of the Internal Revenue Service asking him to suspend implementation of new fuel tax rules that would impose a “significant administrative burden” on general aviation businesses and “create financial risk for the Airport and Airways Trust Fund.” The new rules would raise the tax rate on jet fuel to that of costlier highway di
After promising that a new system for funding the FAA would be announced by late last spring, the White House admitted this summer that internal disagreements within the Bush Administration had pushed the project to a back burner.