President Obama's Proposed 2014 Budget Will Hurt GA

Green-Dollar-iconA section of President Obama’s proposed 2014 budget aims to “reduce the deficit and more equitably share the cost of air traffic services” through a “$100 per flight fee” payable to the FAA, with exceptions. The fee would not apply to piston, military, public, or air ambulance aircraft as detailed on page 43 of the budget. It would also exempt Canada-to-Canada flights and those operating outside of controlled airspace. The user fee is one of two proposed measures that would directly affect general aviation. Aviation interest groups, from AOPA to GAMA to NATA, responded quickly, and negatively, to both proposals.

Also included on page 20 of the White House budget proposal is a proposal to “eliminate special depreciation rules for corporate purchases of aircraft,” shifting the period from five years to seven years. The White House says the change would make consistent the treatment of commercial and corporate passenger-carrying aircraft and “save $3 billion over 10 years.” The White House believes the proposed user fee “would generate an estimated $7.3 billion over 10 years.”

According to Craig Fuller, the fee proposal is “designed specifically to open the door for new, higher fees in the future.” GAMA released a statement saying, “The budget continues to promote policies that hurt general aviation and fail to lay the foundation for growth” in the sector. According to NATA president and CEO Thomas L. Hendricks, “This would be another hit on general aviation that simply doesn’t do much in terms of deficit reduction but would certainly have a negative impact on aircraft the manufacturing sector.”  (CalPilots Editor’s Note: We agree with Craig Fuller on this one. Once they have a infrastructure in place to collect fees, then governeent increases those fees to support itself. It is very doubtful that any of the money collected would even get to the FAA).

“Unfortunately, the President’s budget is more of the same for general aviation: more fees, more taxes, and more attacks on the industry,” said Bunce, adding that, “General aviation manufacturers are a key contributor to exports and economic growth.  The Administration needs to focus on substantive policies and refrain from divisive rhetoric that undermines this important industry.” – GAMA president and CEO Pete Bunce

Budget Wording –

Share Payments More Equitably for Air Traffic Services.

All flights that use controlled air space require a similar level of air traffic services. However, commercial and general aviation can pay very different aviation fees for those same air traffic services. To reduce the deficit and more equitably share the cost of air traffic services across the aviation user community, the Budget proposes to create a $100 per flight fee, payable to the Federal Aviation Administration, by aviation operators who fly in controlled airspace. All piston aircraft, military aircraft, public aircraft, air ambulances, aircraft operating outside of controlled airspace, and Canada-to-Canada flights would be exempted. This fee would generate an estimated $7.3 billion over 10 years. Assuming the enactment of the fee, total charges collected from aviation users would finance roughly three fourths of airport investments and air traffic control system costs. To ensure appropriate input from stakeholders on the design of the fee, the proposal would also establish an expert Commission that could recommend to the President a replacement charge, or charges, that would raise no less in revenue than the enacted fee.