Budget details confirm user fees on agenda for the future

May 12, 2009

Information about the Obama Administration’s budget proposal for the FAA released May 12 makes it clear that the White House seeks a fundamental change in the funding of our nation’s aviation system. While seeking authority to spend billions of dollars from the general fund for other modes of transportation, the new administration seems determined to radically reduce general fund support for aviation in America.

This week’s budget documents expose the administration's desire to shift to a user fee-funded system. Equally alarming for pilots is language laying the groundwork for debate over whether general aviation should pay a much larger share of the FAA’s budget. Starting in 2011, the administration proposal envisions $9.6 billion coming from user fees—up more than $2 billion from the initial proposal just two months ago. That figure rises to $11 billion by 2014.

“We had hoped that the whole user fee debate was behind us after both the House of Representatives and the Senate opted for a tax-based system during the last session of Congress,” said AOPA President Craig Fuller. “The new budget details open the debate about departing from the efficient and time-tested system of using fuel and ticket taxes along with support from the general taxpayer monies to fund the FAA.

“AOPA remains convinced that the current system of fuel taxes collected at the pump and ticket taxes collected at the counter, combined with a healthy contribution from the general tax fund, remain the best way to pay for the nation’s aviation system and avoid an unfair burden on general aviation and costly new bureaucracy.”

The Fiscal Year 2010 budget proposal uses the current financing system, waiting until 2011 before making any changes to the funding system. Approximately 75 percent ($11.7 billion) of the FAA’s funding will continue to come from fuel and ticket taxes during 2010, with the remaining 25 percent ($4.3 billion) coming from the general tax fund.

But beginning in 2011, the administration anticipates replacing $9.6 billion in tax revenues to fund the FAA with the same amount from user fees. At the same time, contributions from the general fund could drop as low as 10 percent of the FAA’s funding requirements.

In addition, the administration has said that the funding system needs not only to be directly tied to the FAA’s costs, but that it needs to be more equitable. In past proposals, based on flawed cost analyses, that has meant shifting billions of dollars’ worth of cost from the airlines to the GA pilot.

“It is clear that we have a lot of work to do. I do not believe the new administration seeks to do harm to our national aviation system, but rather they fail to understand the consequences of the policy shifts they are proposing. There are an abundance of examples of the approach proposed by the administration. Unfortunately, the outcome always decimates the general aviation community,” said Fuller.

“In the United States, it is hard to contemplate a national aviation system that fails to recognize the importance of one segment of aviation that serves all 5,400 airports across the nation. Our job is to help the administration understand the importance of a strong general aviation community and the advantages of a tax-based system over a user fee-based system,” Fuller continued. “Fortunately, there are many in both Houses of Congress who already understand and who are pressing ahead with legislation to reauthorize the current structure of aviation excise taxes combined with an adequate general fund contribution. AOPA is already working with them to ensure the FAA gets the authorization and funding it needs without imposing a huge burden that could cripple GA, which is, after all, a key component of the nation’s transportation system.”