User Fees – Think You Don’t Have to Worry – Think Again

The FAA, meanwhile, isn’t giving up easily. Blakey says she believes the proposal “absolutely does have a very high probability of becoming law.” And there are some signs the Senate is a bit more open to the user-fee idea. Sen. Jay Rockefeller, who is working on a funding bill, has said he’s “not offended” by the concept of user fees and knows “that the status quo [funding scheme] is not good enough.” Rockefeller is expected to propose an FAA bill by the end of April. If a law isn’t passed by the end of September, the current ticket-tax system expires with nothing to replace it, meaning FAA funding shortfalls.

“We all agree that we need more money, and you all are saying, ‘No, not me!'” Sen. Trent Lott, who’s working with Rockefeller, told a group of GA and commercial-aviation leaders recently. “That’s just not the way it’s going to happen.” Bluster, sniping, and lobbying, be damned. Friday, March 30, 2007
A Civil War Erupts Over FAA’s New Funding
Proposal in Washington
By Angie C. Marek
U.S. News & World Report

On February 14, the day the Federal Aviation Administration proposed a new funding plan for the entire agency, JetBlue Airways was experiencing a meltdown of epic proportions: Flummoxed by an ice storm, nine of its planes sat on the runway at New York’s John F. Kennedy International Airport, passengers stranded inside, for six hours or more. The JetBlue incident, of course, was a debacle. Depending on what you believe, the FAA’s revolutionary funding proposal was a bit of one, too.

There’s a reason, though, for revolution. In the next decade, demand for air travel is expected to triple. At the same time, the Aviation Trust Fund, which currently pays many of the costs associated with running the FAA’s air traffic control, is at all-time low. The agency is also trying to upgrade to using the global positioning system, which would allow it to better manage congestion and avoid air traffic gridlock. Its new funding proposal, the FAA says, will enable that.

“It is absolutely a crucial turning point, not just for the FAA but for future of our entire aviation system,” Marion Blakey, the top official at the agency, tells U.S. News. “We’re at the pivot point where either we decide to make a solid, sustainable commitment to the [upgraded next-generation] system … or we miss that opportunity altogether.”

However, skeptics and members of the general aviation community-those who use small planes and business jets-are howling over how the FAA plans to get there. The agency has proposed abolishing the 7.5 percent tax on airplane tickets that currently makes up about half of the money going into the Aviation Trust Fund each year and replacing it with a more than 200 percent increase in taxes on most aircraft fuels, as well as special fees for planes using domestic airspace.

The agency also wants to charge general aviation fliers each time they land at one of the top 30 major U.S. airport hubs. Those same pilots will also pay more to upgrade, renew, or request a duplicate copy of their pilot’s licenses.

FAA officials say their proposal will answer a fundamental problem: The ascent of low-cost carriers like Southwest Airlines has made ticket taxes not as profitable or dependable as they once were. Business aircraft, meanwhile, have become more prevalent in the skies in recent years, while not picking up a representative share of the trust-fund contribution.

The proposed changes would be seismic for the general aviation community, which fought off a similar bid to create user fees in 1997. These days they don’t pay to use domestic airspace. Costs for pilot’s licenses and renewals, typically about $5, would also jump to $120, a sum FAA officials say just covers the processing costs.

“We’re getting letters and phone calls every day from our members-the small-community businesses in places like Hines County, Miss.,-telling us these fees will force them to give up flying all together,” says Ed Bolen, president and CEO of the National Business Aviation Association, who compares the tensions in the aviation community now to “a civil war in Washington.”

Republican Sen. Jim Inhofe, a longtime GA enthusiast, has estimated about 88 percent of small-plane pilots would stop flying under the new system; Bolen’s organization emphasizes that 70 percent of fliers using GA for business purposes own tiny turboprop or piston aircraft, “not fancy business jets, like FAA would have you believe.”

So far it looks as if such arguments are resonating. In the House, Rep. Jim Oberstar, chairman of the House committee handling the proposal, said last week he hoped to give the proposal “a proper burial.” One Republican on his committee, Rep. Vernon Ehlers of Michigan, called the FAA’s scheme “dead on arrival” at its first hearing.

“I’m not even convinced that the current funding system isn’t sufficient to fund the [air-traffic upgrades],” says Rep. Jerry Costello, who chairs the House’s aviation subcommittee. Government Accountability Office reports, he adds, indicate that for the first year at least, the FAA would actually get $600 million less under the new plan than the current one. From fiscal years 2009 to 2012, the GAO estimates the FAA would get $900 million less. Blakey denies the proposal would short-shrift the FAA.

Members of Congress are also skeptical of a new 13-member outside advisory board that would advise the FAA on fees. That board could raise some of the rates based on the FAA’s needs or to reduce some congestion. Critics say it makes the agency less accountable to Congress-and possibly less worried about possible cost overruns during modernization.

Some outsiders argue, however, that the strong rejection of the FAA’s idea is helped along by the enormous influence the GA and business aviation communities wield on Capitol Hill. The Aircraft Owners and Pilots Association, which represents more than 410,000 hobby fliers, is lobbying aggressively against the idea. It contributed more than $1.8 million to election campaigns in the 2006 cycle alone, including $10,000 each to Oberstar, Costello, and Ehlers. AOPA has also spent more than $11 million on lobbying since January 2005.

The FAA, meanwhile, isn’t giving up easily. Blakey says she believes the proposal “absolutely does have a very high probability of becoming law.” And there are some signs the Senate is a bit more open to the user-fee idea. Sen. Jay Rockefeller, who is working on a funding bill, has said he’s “not offended” by the concept of user fees and knows “that the status quo [funding scheme] is not good enough.” Rockefeller is expected to propose an FAA bill by the end of April. If a law isn’t passed by the end of September, the current ticket-tax system expires with nothing to replace it, meaning FAA funding shortfalls.

“We all agree that we need more money, and you all are saying, ‘No, not me!'” Sen. Trent Lott, who’s working with Rockefeller, told a group of GA and commercial-aviation leaders recently. “That’s just not the way it’s going to happen.” Bluster, sniping, and lobbying, be damned.

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