NextGen and AIP funding, but no user fees, in President’s new budget

February 14, 2011

The White House on Feb. 14 released a budget that avoided user fees, provided funding to advance NextGen modernization, and set aside money specifically for improvement projects at general aviation airports.

“This is a long and extraordinarily complex document, and a complete review of all the language and nuances takes time,” said AOPA President Craig Fuller. “But our initial reading indicates that the president has recognized the need to modernize our aviation system while maintaining critical infrastructure—all funded by a tried-and-true system of excise taxes and general fund contributions. All of us in the general aviation community find this encouraging.”

The president’s budget sets aside $1.24 billion for NextGen modernization, an increase of $370 million over 2010 funding. NextGen refers to a range of initiatives designed to raise capacity, improve safety, increase efficiency, and enhance communication within the national air transportation system. At the heart of NextGen is the transition from a ground-based to a satellite-based air traffic control system as well as new in-cockpit technologies that will help pilots improve their situational awareness of everything from traffic to weather.

In addition, the budget preserves Airport Improvement Program (AIP) funding for smaller airports—money that provides federal matching grants for critical infrastructure improvements such as runway resurfacing and extensions, taxiway construction, and airport lighting. While the budget reduces overall AIP funding from $3.5 billion to $2.4 billion, it specifies that the cuts are to come from large and medium hub airports, preserving monies for smaller commercial and GA airports that do not have alternative means of raising outside capital. At the same time, the budget frees those larger airports to raise passenger facility charges, increasing their flexibility to generate their own revenue.

The budget also apportions $50 billion in the first year for “roads, railways, and runways.” Of that money, $250 million would be in the form of mandatory general fund contributions to advance NextGen and make near-term improvements in air traffic control infrastructure. Of that, $200 million would be used to accelerate research, advance development, and implement engineering solutions for NextGen technologies, applications, and procedures. The remaining $50 million would be used to upgrade FAA infrastructure such as power systems and air traffic control centers. In addition, the budget would provide a one-time boost of $3.1 billion to the AIP for runway construction and other improvements designed to increase overall aviation system efficiency.

Finally the budget does not propose new user fees, choosing instead to rely on the time-tested funding formula AOPA has long supported.

“We are grateful to the bipartisan action of the House of Representatives in telling the president that user fees are not an acceptable funding option,” said Fuller, referring to a Jan. 21 letter to President Barack Obama signed by 116 members of the House from both sides of the aisle. That letter stated that inclusion of user fees in the Fiscal Year 2012 budget "would be a step backward in our efforts to modernize our air traffic control system and fund FAA operations." The effort was led by Rep. Tom Petri (R-Wis.), chairman of the House aviation subcommittee, and Rep. Jerry Costello (D-Ill.), ranking member of the subcommittee.

While much of the proposal looks positive for GA, at least one issue—the availability of guaranteed low-interest loans to help aircraft operators equip for NextGen—remains in doubt.

“The budget specifies that a National Infrastructure Bank will guarantee private loans to help airlines purchase equipment in support of NextGen,” said Lorraine Howerton, AOPA vice president of legislative affairs. “Unfortunately it does not say anything about providing similar assistance to general aviation operators.”

AOPA has long sought parity between the airlines and the GA community when it comes to equipping for NextGen.

“For NextGen to really work, the industry needs to ensure that the maximum number of aircraft is participating,” said Melissa Rudinger, AOPA senior vice president of government affairs. “Mixed equipage will diminish the value of NextGen for everyone, so it’s imperative that all types of system users get the help they need to invest in the necessary technology. I can think of no other initiative whose success has depended so heavily on investment by the end users—and that can be a heavy burden for individual operators who have no means to offset their investment.”

“We are committed to continuing to work for parity,” added Fuller. “When it comes to the air transportation system, access is everything, and that includes access to the full range of services and safety benefits promised by NextGen.”

Of course the president’s proposal is simply the first step in the budgeting process.

“This 2012 budget proposal comes even as we are looking at revisions to 2011 spending plans now being developed in the House and Senate, where both bodies are seeking ways to be responsive to voters who expect spending reductions. In this environment, a great deal can change between now and the time a final budget is approved,” said Fuller. “Even so, this proposal represents a good start on recognizing the priorities of the entire aviation community, including GA. We look forward to working with members of the House and Senate to ensure that the final budget meets the needs of the aviation community, and the larger American public, now and into the future.”

Elizabeth Tennyson

Elizabeth A Tennyson | Director of Government Affairs and Executive Communications, AOPA

Director of Government Affairs and Executive Communications Elizabeth Tennyson joined AOPA in 1998, the same year she earned her private pilot certificate. She also holds an instrument rating and enjoys jumping out of planes almost as much as flying them.