AOPA Pilot Magazine
July 2007 Volume 50 / Number 7
FAA Funding Debate: Hanging Tough
Why GA is sticking together through thick and thin
As we go to press, the Senate commerce committee has drawn up its version of a compromise bill in the FAA funding debate. Authored by Senators John D. Rockefeller IV (D-W.V.) and Trent Lott (R-Miss.), the bill gives with one hand but takes away with the other.
Because of AOPA member opposition to user fees, the Senate bill barely made it out of committee after a close and hard-fought 11-to-12 vote. This was the opening round in what will be a continuing battle against user fees and other attacks on general aviation.
Senators Rockefeller and Lott proposed:
- A $25-per-flight fee for turbine-powered aircraft flying in controlled airspace.
- A fuel-tax decrease for the airlines, which would eliminate the current 4.3-cents-per-gallon tax the airlines now pay.
- A fuel-tax increase on Jet A fuel used by noncommercial aircraft — up to 49 cents per gallon.
- An industry-government board to direct spending from the FAA's Airport and Airway Trust Fund (the recipient of current fuel taxes, and the proposed new taxes and fees).
- Allowing the FAA to set fees and spending without consulting Congress or the courts.
And finally, a bone is tossed to general aviation: Avgas fuel taxes would remain the same.
So now we have two proposals: The FAA's, which we have discussed in earlier issues of AOPA Pilot and online, and the Rockefeller/Lott bill. So the dynamics of the legislative give-and-take have grown — and become more complicated. By the time you read this, a third bill — from the House aviation subcommittee — will have been put on the table. Then the wheeling and dealing continues, as the relevant committees seek common ground.
But we still know where the FAA stands. It's pretty obvious that FAA Administrator Marion Blakey and company aren't thinking in terms of compromise.
Although we didn't need any convincing, Blakey reaffirmed her agency's attitude toward general aviation's stance in the FAA funding debate with a revealing quip. She was speaking at the Aircraft Electronics Association convention in Reno, Nevada, on March 29, and was trying to explain away what she called "horror stories" about the FAA being anti-GA. She offered the following gaffe:
"In our proposal, Joe Pilot in a Cessna 172 will experience an operating-cost increase of about $4 per hour. In other words, the owner of a very expensive airplane is engaged in a heated dispute that hinges on the cost of a Starbucks latte. It's important to note here that if the fuel tax is increased, it still represents less than 5 percent of the overall cost to fly your GA aircraft."
This demonstrates just how little Blakey — a nonpilot, like so many of her predecessors — understands the impact that increased fuel taxes would have on general aviation flying. If the FAA gets its way, fuel taxes on avgas will jump from 19.4 cents per gallon to 70.1 cents per gallon — a 366-percent increase! Taxes on jet fuels would rise from 21.9 to 70.1 cents per gallon. This means that "Joe Pilot" who flies his Cessna 172 100 hours per year would in fact have to shell out some $507 more in fuel taxes. And "Joe Jet Pilot" who flies, say, his Pilatus PC-12 or EADS Socata TBM 850 200 hours a year would pay about $5,110 more in annual fuel taxes. I said "about."
That's a lot of lattes. Do these numbers sound like 5 percent of total operating costs? Most pilots would say no, and to back that up AOPA conducted a survey. We learned that 88 percent of pilots would cut back their flying if fuel taxes were increased by the FAA-proposed amounts. The subsequent ripple effect would cut revenues throughout the entire general aviation infrastructure and, ironically, cut fuel-tax revenues as pilots flew less.
Is the aviation trust fund going broke?
AOPA and its political allies don't think the Airport and Airway Trust Fund is going broke, as the FAA suggests. Under the current financing system, many economists have predicted growing surpluses in the trust fund. There's a $2 billion surplus today; in 10 years the surplus should exceed $6 billion.
But the FAA complains that the trust fund revenue is subject to ill-defined "major swings from year to year because of factors that are unrelated to the cost of providing service," according to its Web site, so the cost of modernizing the air traffic control system relies on a "dependable funding stream that can pay for NextGen." For the FAA, that dependable stream is user fees and fuel-tax hikes.
But the existing finance scheme is already pumping up the trust fund. One source of funds — airline ticket taxes — is on a steep rise, buoyed by recent surges in airline ticket prices.
Everybody's doing it
Blakey has often implied that user fees are the wave of the future, simply because so many other western nations rely on them for financing their aviation infrastructures. For her, having user fees means joining the rest of the world in sound planning for the future.
Somehow, our aviation system is being left in the dust by those propelled by inefficient, unsafe fees — such as those charged by Eurocontrol and many individual European nations, which charge hundreds, if not thousands, of dollars per flight in en route, landing, and approach fees. A previous article in this series dealt with the implications of such fee-based systems (see "FAA Funding Debate: Euro-Fees Fears," April Pilot,but suffice it to say that increased fees and taxes most definitely do not improve service, handling, or safety. Nor do they relieve air traffic congestion.
The United States has the best, most efficient air traffic control system in the world. It got that way because the current funding and operating strategies work well.
An agreement among friends
The FAA proposal contains provisions for creating a decision-making board consisting of representatives from the government and the airlines. Presumably, this is out of a conviction that airline executives are best qualified to design, and participate in controlling, the ATC system of the future. But we've seen how the airlines manage their affairs. All but a few air carriers are, or have recently been, bankrupt.
This is understandable, for several reasons. According to John Newhouse's new book Boeing Versus Airbus, in the three years after the terrorist attacks of September 11, 2001, the airline industry worldwide lost more money than it had earned since the start of powered flight. Then fuel prices soared.
So the airlines, overextended by the expanded routes and bloated fleets pursued under deregulation, have been looking for any and all methods of lowering their costs. Hence the airlines' interest in shedding its fuel taxes, shifting more of the FAA financing burden to general aviation, and influencing the government to make American airspace more airline-friendly.
But does this mean they have a right to closed-door manipulations? No way. AOPA believes that Congress should have oversight over funding decisions, the way it has now. Allowing user fees means that an FAA-airline coalition can determine when, how, and how much user fees can be levied.
Why should general aviation suffer at the hands of an industry looking for a bailout? To a very large extent, the airlines planted the seeds of their own troubles. The policies they followed under deregulation left them vulnerable to unanticipated setbacks.
"Deregulation was never about building a strong industry," Newhouse writes. "It was about lowering ticket prices by creating competition...the carriers had invited a perfect storm. Having foolishly overextended themselves, they became largely oblivious to the harmful effects on earnings of rampant competition, much of it mindless. Their new equipment not only allowed but dictated expanded service...."
Now the airlines are cozying up to the FAA, looking for a way to reverse their fates at the expense of general aviation — a vastly underestimated force.
We're being overrun!
The FAA is fond of saying that gobs of money from new funding sources will be needed to cope with the expected onslaught of very light jets. It has said that 1,500 of these new VLJs will clog the skies in the next five years. By the time all of them come to market, some industry analysts have said, there will be 5,000 VLJs.
This isn't likely. So far, only two such models of these airplanes have been certified. Many others have fallen by the wayside, victims of too much hype and too little in the way of expertise and financial resources. It's much more likely that they will number in the low hundreds, not thousands.
And VLJs won't be flying into large hub airports, where airline officials say they will cause great disruptions in flow control. Their advantage is in flying point to point, to airports not served by the airlines.
That's all we want
Buried in the FAA funding proposal are clauses that would charge pilots for flying in Class B airspace, and to 215 airports deemed busy enough to warrant landing fees. With a quick first reading, you might miss these provisions. So the proposal isn't simply based on fuel-tax increases and boosted fees for such things as registering your airplane, obtaining a pilot certificate, and processing a dozen other similar services.
AOPA wonders if it will stop at this. User fees have a way of creeping upward, and spreading to new areas of activity. That's what happened in Canada, where Nav Canada started out with an annual fee charged to pilots. But now, pilots flying in Canada pay a fuel tax, as well as user fees for flying into eight airports. This kind of fee creep also has taken place in New Zealand and Australia (see "FAA Funding Debate: A Cautionary Tale," June Pilot).
A lot can happen before September 30, the deadline for enacting a new FAA funding law. The Rockefeller/Lott bill is just one example. In the meantime, AOPA will be tracking the issue closely in these pages, and on our dedicated Web site. Check back with us regularly for timely updates, and we'll revisit the twists and turns of this issue again next month.
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