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History of the User Fee Fight in the United States

On Capitol Hill

History of the User Fee Fight in the United States

In 1995, at the urging of the airlines, the administration and some members of Congress proposed user fees as a mechanism to fund the FAA in a balanced federal budget. At that time, AOPA worked with its allies in Congress to bring about significant management reforms within the FAA, including creation of a Management Advisory Council (with an air traffic subcommittee), creation of an air traffic control COO/CEO, exemptions from federal procurement and personnel rules, a fixed term of service for the FAA administrator, a requirement that the FAA develop a cost accounting system, and funding reform to more closely align aviation tax dollars with FAA expenditures.

However, even with these management reforms in place, the user fee debate remained. President Clinton's 1997 budget request called for $300 million in new user fees in fiscal year 1998, followed by more than $8 billion in user fees in 1999. Under this user fee scheme, the FAA would charge user fees for services, such as air traffic control, aircraft and pilot certification, training, and licensing. This came under great opposition by AOPA and the general aviation community, and with the passage of AIR-21-the FAA Reauthorization Act-Congress rejected the administration's user fee proposals.

In 2003, the issue again surfaced, this time in the new FAA Reauthorization Act-Vision 100. As a result of AOPA's efforts, both the House and Senate drafted legislation that contained prohibitions against privatizing air traffic control. However, President Bush threatened to veto the bill unless the prohibition against privatizing the air traffic control system was removed. Ultimately, Congress passed the legislation without including those assurances against privatization after the FAA acknowledged it was not pressing for privatization.

With the airline industry struggling to redefine itself, many carriers continue to operate on the edge of bankruptcy, looking for every possible means to save money. Faced with record fuel costs and a thin bottom line, air transport organizations and airline CEOs have launched an aggressive campaign, asserting that airlines overpay for services and disproportionately fund federal responsibilities. The major airlines argue that general aviation users should pay more and have announced their own plan for user fees.

But this plan goes well beyond the issue of funding; it constitutes an attempt to overthrow Congress from its position as the FAA's board of directors. Instead of Congress overseeing the FAA through annual appropriations and regular reauthorizations, the airlines would control the skies.

Although FAA Administrator Marion Blakey had committed to sharing her vision for user fees with Congress earlier this year, no official proposal has been made public. The FAA now anticipates unveiling its user fee proposal next February-a scant seven months before the current system of aviation taxes will expire.

Return to the "User Fees Are Not the Way to Fund FAA Services" issue brief.

Posted Wednesday, July 19, 2006 2:19:39 PM