Congress discusses paying for FAA programs

May 7, 2009

The senior members of the House Transportation and Infrastructure Committee and its aviation subcommittee spoke in favor of raising funds for the FAA with a combination of taxes and a General Fund contribution in lieu of user fees in a House Ways and Means Committee hearing May 7, citing support from AOPA and other general aviation organizations.

In a hearing on the financial status of the Airport and Airway Trust Fund, Transportation and Infrastructure Committee Chairman James Oberstar (D-Minn.) and Ranking Member John Mica (R-Fla.), and aviation subcommittee Chairman Jerry Costello (D-Ill.) and Ranking Member Tom Petri (R-Wis.) went before the House Ways and Means Committee and testified that FAA programs can be funded by aviation excise taxes, a reasonable General Fund contribution, and a modest increase of GA fuel taxes. A proposed FAA reauthorization bill would raise taxes from 19.3 cents per gallon to 24.1 cents per gallon for avgas and from 21.8 cents per gallon to 35.9 cents per gallon for noncommercial jet fuel.

“Over the years, the aviation excise taxes that support the Trust Fund have proven to be a stable and adequate source of funding for aviation programs, without imposing undue administrative burdens on system users. Changes to the current system of excise taxes should be made only if such changes will improve upon this record of stability, revenue adequacy, and ease of administration,” said Oberstar in his prepared testimony.

Mica stressed the importance of making sure the trust fund takes in enough revenue to accommodate growing demands on the air traffic control system: “Congress must seriously examine what we can do to help stabilize the Airport and Airway Trust Fund and ensure that it remains a viable tool for financing our aviation infrastructure needs.”

The hearing dealt with how to fairly distribute the cost of the FAA reauthorization bill approved earlier this year by the Transportation and Infrastructure Committee, H.R.915. Discussion at the hearing focused on how the public and different types of users benefit from the national air transportation system, and how much of the costs should be borne by each group.

While the Transportation and Infrastructure Committee sets policy and spending limits for the FAA, the Ways and Means Committee has the authority over the taxes to fund air traffic control modernization, airport improvements, and overall FAA operations. Historically, the FAA has been funded by a combination of aviation taxes, which contribute to the Aviation and Airway Trust Fund, and a General Fund contribution, which amounts to about a quarter of the funding. In recent years, the FAA has been operating under a series of temporary funding extensions, the latest of which runs through the end of September. Funding H.R.915 would require a slight increase in the General Fund contribution but no fundamental change in the way the FAA is funded.

Costello noted that a proposed increase in GA fuel taxes would help meet the FAA’s funding needs, adding that AOPA and other GA groups have supported this tax increase over the imposition of a user fee system.

Petri said he continues to support the structure of the funding recommendations which were developed in a bipartisan fashion, and noted in his statement that “General aviation is strong in the United States compared to other countries and unique. Of all the world’s licensed and active general aviation pilots, 62 percent reside here in the U.S.”