Let's imagine that, like many pilots, you set up a personal fund — like a holiday savings program — that you dedicate to your flying activity. Perhaps it's an account that you are paying into monthly to eventually upgrade your panel or to rent an aircraft for a vacation trip. And, for the sake of this example, you now have $2,000 in this special account. What if you were told that, because of a law, you could spend only $750 out of that fund? To make matters worse, you also found out that your neighbor, who doesn't in any way share your passion for aviation, was using your aviation bank account to make his credit look better.
A ridiculous-sounding scenario, I know, but it represents the government's historical treatment of our aviation taxes in the Airport and Airway Trust Fund. One of the most frequent questions that I am asked when meeting members throughout the United States is "Why the call for user fees, when the government hasn't spent the money in the aviation trust fund?" In past years, the desire to control the budget deficit has led Congress to hold on to some of the money that transportation users pay into the fund, instead of spending it for needed improvements.
The law that established this trust fund — which is collected through taxes on airline tickets, cargo, and a general aviation fuel tax — clearly stipulates that it must spend its dollars on aviation only. But in an effort to control spending, Congress imposes a cap on the total annual expenditures of the federal government, including aviation. Funding for the FAA and airports must compete with other spending priorities, even though the aviation community provides the funds for most aviation spending through the trust fund. Therefore, no matter how much money builds up in the trust fund, many improvements wait in vain.
Keep in mind that the aviation trust fund is only one of the trust funds held hostage to this process. In May, Congress approved, and President Clinton signed, a huge highway bill that will send $216 billion to the states over the next six years for road and mass transit construction and improvements nationwide. The positive precedents that this bill sets for transportation spending may have a major effect on the future financing of the FAA and airports. The federal government is showing a budget surplus for the first time in two decades.
Lawmakers led by House Transportation and Infrastructure Committee Chairman Bud Shuster (R-Pa.) engineered a change in the budget treatment of highway spending. Like aviation, federal highway spending is financed by a trust fund that relies on receipts from users through the gas tax that car and truck drivers pay. If users are paying, their money should go for its intended purpose, reasoned Shuster. Teamed with the committee's leading Democrat, James Oberstar (Minn.), and Senate Environment and Public Works Committee Chairman John Chafee (R-R.I.), Shuster rewrote the law so that highway spending can rise to the level of highway trust fund receipts from the previous year.
It's a common-sense approach, and it may sound very familiar to you — three years ago AOPA first proposed a similar mechanism for aviation that we call Linked Financing (see " President's Position: Linked financing," May 1996 Pilot). Rep. Ron Packard of California introduced such a bill, H.R.1389, in this Congress. And the passage of the highway bill, combined with the disappearance of the budget deficit, makes those of us who work on aviation funding in the nation's capital hopeful about making meaningful changes next year. Of course, the administration opposed Chairman Shuster's effort to fully spend highway revenues for its intended purpose.
According to the Office of Management and Budget, the uncommitted balance in the Airport and Airway Trust Fund, including interest earned on the unspent dollars, will climb to $9.3 billion at the end of this year, and $25.3 billion by 2003. To put that in perspective, the amount that the trust fund will contribute to the FAA's fiscal year 1998 budget, including grants to airports, is $5.6 billion.
The administration wants to charge $6 billion in user fees (i.e., more taxes) over the next four years, to allow for eliminating the portion of the FAA's budget that comes from the general fund — "April 15" money collected from all taxpayers. Wiping out the general fund contribution to aviation would free the money for spending on the administration's pet social programs.
The administration is swimming against the tide. There's no justification for charging aviation billions more in new taxes when the budget deficit has disappeared. Finding revenue is not the problem any more. Rather, the problem is finding ways to spend it.
Comparisons to the highway model go only so far, because modernizing the FAA for the next century is not the same as handing out dollars to the states to pour concrete. Clearly, we must preserve the general fund contribution to aviation in the process. And experience has shown that we absolutely must not diminish the current strict oversight of the FAA performed by three important committees in Congress.
The process can't begin until next year's session of Congress, which will be the first in decades to start writing a budget with a surplus under its belt. The going may be slow, but AOPA Legislative Action will be there to make sure that our congressional leaders look seriously at the way the highway bill has paved the way for a new look at aviation funding. If the Clinton administration finally drops its attempts to fund the FAA with user fees — after three attempts and three failures — that would help us to make real progress.
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