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User Fees Issue Beginning to Boil

The long bubbling issue of user charges became an official issue when the Senate held the first hearing of the year into FAA’s FY 2007 budget and reauthorization of the aviation trust fund, which is due to expire September 30, 20007. In her testimony at the late March hearing, FAA Administrator Marion Blakey said the administration’s plan for the future of the trust fund would be released later this spring.

Administrator Blakey refused to give details of the proposal, saying it was still being formalized. She did tell members of the aviation subcommittee that a revenue source is needed tied more to usage and what she termed as “fairer.”  She said the FAA has listened to positions of the airlines and general aviation and is factoring these comments into the final proposal. “I look forward to the debate and expect that the discussions will be frank, open and spirited.”

Spirited they will be. For the first time the airlines are united in their position that they want general aviation to pay more.  The airline industry says it pays 90 % of the revenue into the trust fund but accounts for a little more than 60 % of the operations of the air traffic control system. The airlines’ basic position, as expressed by the Air Transport Association (ATA), is that charges should be paid by corporate jets that normally use the air traffic control system and fly the higher altitude airspace. Airlines frequently call this and the major airports they use “commercial airspace.” They say piston-powered aircraft using the lower altitudes would be able to continue paying the avgas fuel tax and not a user fee. Their position has not yet been finalized about VFR flights that ask for flight following or other services of the ATC and airport towers.

Norman Mineta, Secretary of Transportation, has said “general aviation” will not be charged a user fee. He does not, however, say whether the corporate jets are considered general aviation.

This ambiguity leads some pilots and airplane owners in the personal flying arena to dismiss the possible effects of a user fee.  Phil Boyer, president of Aircraft Owners and Pilots Association (AOPA), warns that if a user fee is adopted for some general aviation flights it would not be long until it is expanded to cover all.

Some observers have said the idea of omitting some general aviation flights from user charges might be a ploy to divide the GA community and reduce the strength of opposition.

The business flying segment of general aviation has started to circle the wagons and begin firing shots at the attackers. Ed Bolen, president of National Business Aviation Association (NBAA), has called on members to use a prepared letter on the Association’s web site to let their opposition to user fees be known to legislators. He also appeared on a panel at FAA’s forecast conference in a head-to-head contact with ATA’s President James May. NBAA is busy in many ways. Immediately after ATA released its position that fees should be charged, NBAA, General Aviation Manufacturers Association (GAMA) and National Air Transportation Association (NATA) held a news conference to release their rebuttals to ATA’s claims and to outline their own position.

FAA claims the trust fund is running out of money and the air traffic control system must be modernized with a steady infusion of money. At a Congressional hearing, however, Administrator Blakey said new technologies not yet known will be needed to increase the capacity of the system. In response to a Senator’s question asking if the FAA doesn’t know what it will need, how can it know how much money will be required, the Administrator said if a steady amount is available the agency can then plan its expansion.

The trust fund was established more than 35 years ago to provide funds for needed airport development. Over the years it has slid from that position to a point where now about 80% of the fund is used to support the FAA.

There have been numerous questions about whether or not the fund is drying up. FAA claims the reduced fares on many airlines because of expansion of low-cost airline companies has reduced the amount of money from the ticket tax. Administrator Blakey told the subcommittee that even though the number of passengers is increasing, it has not made up for the lower fares. A study released by the National Air Traffic Controllers Association disputes FAA and ATA’s claim that there is a downward trend in airfares.

Cargo shippers also pay a tax. Because the ticket and cargo taxes are collected by the airlines, that industry claims it is paying an unfair share into the fund. Under the ATA’s proposal these taxes would be discontinued.

Fuel taxes into the fund are: airlines—4.3 cents a gallon, GA avgas—19.3 cents a gallon and jet fuel used by general aviation—21.8 cents a gallon.

Some general aviation advocates see airline customers paying but airline companies receiving use of airports and the ATA at a much lower rate than a corporate company paying a higher fuel tax.

The ATA position is that with ticket and cargo waybill taxes replaced by user fees, airlines will pay less. However, they would be charged fees for takeoffs, landings, and time in the ATC system. Some wonder how the companies can be pushing for hefty charges on themselves when many are in or facing bankruptcy.

The coming months will see “frank, open and spirited” debates and many moves by the different interests jockeying for position.  The ATA position also calls for less control by the Congress over the trust fund and the ATC. For the Congress to relinquish control seems unlikely.

Since 9-11, many different government agencies are involved in any transportation decision making. This was evident at the public hearing regarding the Washington/Baltimore ADIZ when the listening panel had representatives from the military, homeland security, law enforcement, and other federal agencies joining the FAA.