'A cynical attempt to shift costs'

February 14, 2007

'A cynical attempt to shift costs'
FAA financing bill a first step toward privatized ATC system

FAA Funding Debate

AOPA on February 14 blasted the Bush administration's proposed FAA refinancing bill as a "manufactured crisis based on flawed financial assumptions about the viability of the current funding system and the cost of the 'NextGen' air traffic control system."

Said AOPA President Phil Boyer, "Our government is backing away from the safest and most efficient air transportation system in the world, and setting in motion the steps toward privatization.

"This proposal is nothing more than a cynical attempt to shift FAA costs to a different set of taxpayers, and to take control of the agency away from Congress and put it in the hands of unelected bureaucrats and airline executives," said Boyer.

"It doesn't save money, and it doesn't make the FAA more efficient. This bill would be disaster for consumers, general aviation pilots, and all the communities - ignored by the airlines - that depend upon general aviation for safety, commerce, and air transportation."

Senior FAA officials briefed Boyer and other aviation industry leaders on the "Next Generation Air Transportation System Financing Reform Act of 2007" Wednesday, prior to releasing the text to the public.

No justification for change

The FAA has attempted to argue that it needs to change the financing system in order to pay for the NextGen air traffic control modernization program.

"We support the need to modernize, but listen to the weasel words carefully," said Boyer. "They never say that the current, proven tax system cannot raise necessary funds for NextGen."

In fact, the administration's bill would raise less money than the current tax structure - $600 million less in the first year, according the President's fiscal year 2008 budget submission.

Meanwhile, the Department of Transportation's own projections show the current funding system would generate more than $20 billion through 2012 for the FAA's "facilities and equipment" account.

That would almost double the amount that the FAA has spent on equipment and modernization over the last five years, and it confirms AOPA's earlier analysis of available revenues under the current tax system.

And when asked point blank by aviation subcommittee Chairman Jerry Costello during a hearing Wednesday if the current tax system could fund NextGen, FAA Administrator Marion Blakey reluctantly admitted that it would.

"It begs the question, what is the problem we are trying to solve?" said Boyer.

No tax break for consumers

While the administration claims that its proposed financing system "provides tax relief," Boyer called that a semantic game designed to mislead.

"Whether you call it a tax or a user fee, the consumer - airline passengers and GA pilots - still have to pay it," said Boyer. "The tax burden may shift from one group to another, but the only 'relief' is from congressional oversight of an agency that has a history of overspending and mismanaging large modernization projects."

The proposal would, in fact, more than quadruple the taxes that individual pilots pay. Nine out of 10 GA pilots have told AOPA it would affect their flying were taxes to increase that much.

Who's in control?

The proposal puts Congress in the backseat when it comes to the agency's largest "line of business" - air traffic control. The authority to set user fees and spend money for air traffic control would rest with the FAA administrator and the airline-dominated Air Transportation System Advisory Board.

"As much as I respect Administrator Blakey, I don't believe that the American public should be comfortable with all of that power in the hands of one czarina," said Boyer. "This is, in essence, a blank check that pilots and airline passengers will have to fund."

And FAA spending can spiral out of control unless held in check by Congress. "You need the checks and balances of the U.S. Congress," said former Department of Transportation Inspector General Ken Mead recently. He recalled that Congress had shut down the microwave landing system and the previous attempt at modernization - the advanced automation system (AAS) - when it had gone well over budget.

"I had to testify more times than I can recall on AAS," said Mead, "and it is a fact that it was stopped in its tracks by the checks and balances of Congress."

It's the runways, stupid

The administration promises that its new FAA financing bill would reduce congestion and alleviate passenger delays. Yet its proposals cut Airport Improvement Program (AIP) funding by some 21 percent over current authorized levels.

"The airlines' hub-and-spoke system frequently schedules more aircraft than the airport can handle," said Boyer. "No amount of air traffic control improvement can change the immutable laws of physics - two airplanes cannot occupy the same spot on the runway at the same time.

"To reduce congestion you must either reschedule some airline flights to less desirable times or build more runways. Simple as that."

Who should pay?

The administration contends that the financing system must be changed because "taxes paid by users of the system have no direct link to the costs they impose."

"I can think of no government program in which there is a direct link between individual taxes and individual costs," said Boyer.

For federally funded highways, drivers in more populous states "subsidize" construction in rural areas. Local roads are frequently paid for by general taxes, not direct taxes on drivers.

Public education is funded by all taxpayers, not just those with children in school. In a previous generation, farms were electrified because the government, not the individual consumers, paid for it. Our income tax is calibrated not on government services consumed, but on ability to pay.

"Our current tax system has reliably served the needs of the FAA for nearly 40 years, and it has always provided the money the FAA has needed for rational, well-planned modernization programs," said Boyer. "We have created the most vibrant, robust air transportation system in the world, which serves all citizens, pilot and nonpilot alike.

"If we adopt a user-fee system like other countries of the world, we'll become just like them," said Boyer. "Average citizens will no longer be able to afford to fly, many of the services GA provides to rural areas will cease to exist, and only the rich and the airlines will continue to benefit from the investments all of us have made in our air transportation system."

For more information, see " The FAA Funding Debate and User Fees."

February 14, 2007