User-Fee Aftermath: Other Options Explored...

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FAA Told To Control Costs

Following last week's hearing on the state of the Aviation Trust Fund, members of the House Aviation Subcommittee didn't seem very convinced that user fees would be the answer to the FAA's funding woes. "Switching to a user-fee system raises more questions than answers," according to ranking committee member Jerry Costello (D-Ill.). Other financing alternatives discussed at the hearing included increasing the current aviation taxes, fixing the annual contribution from the General Fund, and providing the FAA with borrowing authority. Ken Mead, inspector general for the Transportation Department, testified, "The Congress and the aviation community need assurances that [the] FAA is doing all it can to control costs before decisions can be made about the adequacy of current funding levels and whether or not additional revenue is needed." Mead also said that congestion pricing -- charging more for takeoff and landing slots during peak travel times -- should be included in the debate and set forth an agenda. "There are four basic steps FAA needs to take -- getting a handle on its cash-flow requirements for existing projects in its capital account, controlling costs and improving the effectiveness of the Agency efforts, finalizing the implementation of a cost-accounting system, and determining funding requirements for future initiatives. Any business seeking an infusion of capital would take these steps. Moreover, these are preconditions for determining whether current funding sources will be sufficient or whether new revenue streams and authority are needed," Mead said.