No FAA funding crisis, congressmen and budget office say

September 28, 2006

No FAA funding crisis, congressmen and budget office say

Airplane on runway
John Mica
John Mica
Jerry Costello
Jerry Costello
Sam Graves
Sam Graves
Vern Ehlers
Vern Ehlers

User fee advocates in the FAA and the airlines must be sorely disappointed today. If they were hoping that "proof" of an FAA funding crisis would be offered up to Congress, their hopes were squashed Wednesday during a House aviation subcommittee hearing, conducted by Chairman John Mica (R-Fla.).

Citing Congressional Budget Office (CBO) projections of a growing surplus in the aviation trust fund, subcommittee ranking member Rep. Jerry Costello (D-Ill.) said, "This new information raises questions about the administration's claims that there is a revenue crisis at the FAA."

The hearing was about financing the Next Generation Air Transportation System (NGATS), the latest version of FAA air traffic control system modernization.

We don't know yet what modernization will cost

But as both witnesses and members of the subcommittee pointed out, the FAA doesn't yet know exactly what NGATS will look like, nor how much it will cost.

"This is putting the cart ahead of the horse when we don't know what we need," said Rep. Sam Graves (R-Mo.), a pilot and AOPA member.

Right now, the FAA thinks NGATS might cost $15 billion over 15 years.

The CBO says the money will be there.

Trust fund will have a surplus

Donald Marron, acting CBO director, testified that the aviation trust fund would have a surplus of "$2 billion at the end of 2006, increasing to $19 billion by the end of 2016." That's based on accepted, conservative government budgeting principles and assumptions.

"It appears that the preliminary $15 billion capital cost estimate for NGATS could be absorbed by the existing FAA financing structure with a general fund contribution that is consistent with or even smaller than recent general fund contributions," said Rep. Costello.

"Administrator Blakey has said that there is a gap between revenue going into the trust fund and the FAA's costs," he said. "I disagree."

Public benefit means public funding

He and others also took issue with the FAA's assumption that the agency would no longer receive some funding from the general fund.

"There is a public interest in the aviation system, and that public interest should be supported by a contribution from the general fund because it is not only those who fly who benefit from the system," said Dr. Gerald Dillingham of the Government Accountability Office (GAO).

"The American people clearly receive a significant benefit from a safe and reliable air transportation system," said Rep. Costello. "Therefore, any discussion of financing the next-generation system must include a contribution from the general fund."

Little support for user fees

And while aviation subcommittee Chairman John Mica (R-Fla.) suggested that user fees were one of the possibilities for funding the FAA, there was little support for that idea among the subcommittee members.

"User fees are the wrong way to go," said Rep. Vern Ehlers (R-Mich.). "It makes it very cumbersome; it gets more expensive. We don't charge user fees to everyone that goes through an intersection with a traffic signal. It's a bit silly to get that specific about the cost."

September 28, 2006