Lawmakers Shift Funds To Preserve Aviation Trust Fund

 - October 2, 2020, 11:59 AM

This story is part of AIN's continuing coverage of the impact of the coronavirus on aviation.

As the U.S. Congress approved a stopgap bill to extend funding for government agencies, including the FAA, through December 11, lawmakers took an unusual step of moving $14 billion out of the federal treasury general funds into the Airport and Airway Trust Fund. The funding will help keep the trust fund liquid as it was in danger of depletion as an unintended consequence of the CARES Act and the ongoing dampened travel in general from the Covid-19 crisis.

The CARES Act gave an exemption through the end of the year from taxes on commercial air transportation, including those on passenger tickets, cargo, and fuel. While the fuel excise taxes remained in place for general aviation, it is a small contribution into the trust fund and the majority of revenue came from passenger ticket and cargo taxes.

The trust fund was established in 1970 originally to help pay for capital improvements for the U.S. airport and airway system. However, over the years it was increasingly used to pay for FAA’s operations and a range of other aviation expenses. In Fiscal Year 2020, it paid for 97 percent of all FAA expenses.

Aviation groups, including the Aircraft Owners and Pilots Association, this spring appealed to lawmakers to take steps to help shore up the trust fund, noting that it had a healthy cash balance of $17.9 billion at the beginning of FY2020. Of that, $6 billion was uncommitted—or not designated for any specific spending. Under the current scenario, the groups were concerned about the uncommitted balance reaching a negative $3.5 billion by the end of the fiscal year.