Double-Oh Seven: Year Of The User Fee?
Will 2007 be known as the year in which user fees were enacted to pay for FAA services? That's what the airlines want, although general aviation's alphabet soup is opposed to it. The issue is guaranteed to come to a head by Sept. 30, when existing law authorizing the FAA's programs, policies and spending on things like airport pavement and radars will come to an end. In the meantime, the new Congress -- complete with new leadership -- convenes this week with reauthorization high on its list of "must-do" tasks. All of which means you'll likely see more and more arguments for and against user fees throughout the year. For its part, the airline industry is leading the fight for them, with its major trade group, the Air Transport Association, saying it supports "a new 'cost-based' mechanism for generating revenues necessary to maintain, operate and enhance the national airspace system." Of course, aviation system users already are paying fees -- through taxes on airline tickets and aviation fuel, as examples -- to cover the government's costs. The airlines, however, merely serve as collection agents for the government, eventually passing on the ticket taxes they collect from passengers and paying next to nothing to use a government system in conducting their business. Meanwhile, general aviation, according to a 1997 study by the U.S. General Accounting Office, is responsible for about 6% of FAA's ATC costs while paying -- conveniently -- about 6% of those costs through existing taxes. But that's not all: The airlines also want more of a say in how the FAA and the ATC system are operated. According to an ATA "statement of principles," the airline industry believes in "A reformed administrative structure, providing for a direct role in governance proportional to the extent of each user category’s financial contribution to the operation, maintenance and enhancement of the national airspace system." And all of this will be coming to a head as first-of-the-year stories in the financial pages say the airline and travel industries' futures are looking up.
General aviation's alphabet soup is reacting strongly and swiftly. Just before the Christmas holidays, AOPA began airing a series of television commercials spreading the message that the existing funding mechanisms aren't broken and that the U.S. economy stands to lose far more than it could gain from levying user taxes on general aviation. AOPA also notes the "FAA claims that it now has a funding crisis, and it, along with the airlines, have argued that the FAA should be funded through user fees for ATC services and other FAA regulatory and certification requirements, rather than taxes on aviation users." Interestingly, AOPA points out that what the ATA and the airlines want would effectively eliminate Congress' role in providing FAA funding and setting its policies and priorities. That's not likely to be something the new Congress will allow. Other organizations, especially the National Business Aviation Association (NBAA), are gearing up for the fight against user fees. In a recent op-ed piece, NBAA President Ed Bolen noted that not only has FAA funding in recent years been stable, but that stability is expected to continue. Further, the FAA's revenues have actually increased since 2000 -- contrary to what the FAA may want the public to believe -- although the agency's operating costs have decreased. Whether 2007 in fact is the year that user fees are finally enacted will depend, in part, on the lobbying abilities of the airline industry and general aviation, along with the degree to which Congress buys into the FAA's pitch that its funding should be made more "businesslike." It also will depend on the kind of pressure Congress perceives from various constituent groups, like pilots and aircraft owners. Watch this space.