Issue Brief: User Fees Are Not the Way to Fund FAA Services

On Capitol Hill

Issue Brief

User Fees Are Not the Way to Fund FAA Services

Summer 2006

The issue

For over a year, the Bush administration has claimed that the existing aviation tax revenues are falling short of the FAA's expenses, noting that ticket prices are not linked to their productivity costs. They also claim that the current tax-based funding system promotes an unstable operating environment for the FAA, making long-term financial planning impossible. Stating tight budget years make continued funding from the General Fund unlikely, the administration proposes to implement a user-fee-based system of revenue collections. The commercial airlines fully support this proposal because they believe it will result in a reduction in their operating expenses and permit them to be profitable. The airlines also believe that a fee-based system will give them more say in how the FAA's air traffic control system is run, permitting them to bully general aviation further away from their major operating airports and airspace areas.

AOPA's position

AOPA opposes user fees for any segment of the aviation community. Historically, user fees have severely impacted general aviation, often curtailing growth in operations. Moreover, a user fee system would limit congressional oversight, effectively removing Congress from its role as the FAA's board of governors. For over a decade, AOPA has maintained that a user fee system for any segment of the aviation community will be harmful to the entire community.

The FAA's financial situation is not in dire straits. In fact, the aviation trust fund is projected to have a $4.2 billion surplus by 2011. Even if the FAA needs more revenue in the future, AOPA believes that user fees are not the best way to collect it for the following reasons:

  • Assessing user fees for air traffic denigrates safety by discouraging aircraft operators from using the services.
  • Collecting the current aviation excise taxes is extremely efficient with a low cost of collection and has been in place for nearly four decades, requiring very little government oversight. Collecting user fees would require a huge new accounting bureaucracy with a much higher cost to collect the fees.
  • Implementing user fees removes critical congressional oversight, directing, and management of FAA resources that are key to an efficient national air transportation system.
  • The air traffic control system is a public system designed to provide services for the airlines that is far in excess of that necessary for general aviation.
  • Operators of light general aviation aircraft contribute $60 million a year and corporate jets pay $210 million annually to the trust fund through fuel taxes.
  • General aviation also supports the aviation system with locally imposed taxes and charges on hangar and tiedown rental, fuel, and other assessments.

Congress has determined that the nation needs a national air transportation system and has contributed to maintaining that system for the benefits of all citizens. The financial well being of one user of our national transportation system should not be used to establish policy affecting all citizens. Using relatively modest facilities with minimal impact on operational costs, general aviation contributes more than $100 billion in economic benefit to the U.S. economy.

Background

For nearly four decades, excise taxes on general aviation fuel, airline passenger tickets, and cargo have financed the bulk of the expenses for airport improvements, modernizing the air traffic control system, researching new technologies, and the operations of the Federal Aviation Administration (FAA) air traffic control system. The taxes deposited into the Airport and Airway Trust Fund support nearly 87 percent of the FAA budget. The remainder of the FAA's budget is funded through a contribution from the General Fund. This reflects the public benefit conveyed to all Americans by the world's safest, most efficient national airspace system.

History of the user fee fight in the United States

Status

Daily, AOPA is fighting to prevent the establishment of user fees.

Although FAA Administrator Marion Blakey had committed to sharing her vision for user fees with Congress earlier this year, no official proposal has been made public. The FAA now anticipates unveiling its user fee proposal next February-a scant seven months before the current system of aviation taxes will expire.

AOPA will continue to strongly fight against the establishment of user fees.

Recent AOPA action on the user fee issue


Updated Wednesday, July 19, 2006 2:23:32 PM