At Least Two Want More Hearings On FAA's Accounting Of The Trust

"Disingenuous." That's a word Congressman Lynn Westmoreland likes to describe what he suspects might be the FAA's characterization of the looming crisis in the Aviation Trust fund.

"I think that's a pretty good way to put it," he told ANN, one day after his subcommittee conducted hearings on the possibility of imposing aviation user fees on general aviation owners and pilots. "It's a little disingenuous."

Speaking from his office at the Capitol, Westmoreland said it's time to look at the way the FAA keeps the Trust Fund's books.

"It's awfully peculiar that the Trust Fund was more than doing its job up until 1999, when we saw this tremendous spike in the FAA's cost of doing business," he said. "There are just some things there that I think need to be answered as to why the Trust Fund was working perfectly until a certain point, then it wasn't. I think there's going to be a few more hearings on this before a decision is made."

Fellow subcommittee member Sam Graves (R-MO) was equally as skeptical one day after the hearings.

"I think there's a lot to that. I really do. We've obviously seen costs go up a little bit with FAA. I do think there's a little bit of a manufacturing process going on here with creating a crisis," Graves told ANN.

As ANN reported Wednesday, leaders from NBAA, AOPA, GAMA and NATA were on Capitol Hill to testify before Westmoreland's subcommittee on why aviation user fees would be a very bad idea.Some even suggested that pilots would be more tempted to circumvent vital safety services rather than pay for them.

Graves, a GA pilot and EAA member, agreed.

"For some reason, there are folks out there who see this huge pot of money just waiting to be tapped into -- and that's general aviation," he said. "That couldn't be farther from the truth. What it's going to lead us to is safety issues. It's going to lead us to a lot of folks just turned off to aviation or who can't afford it. It's expensive now. And the group that's being looked at to bring more revenue in is the group that is the least burden on the system."

But the FAA and some think tanks differ with that opinion. Many believe the airlines' complaint that, while commercial aviation pays 90-percent of the cost for America's air transportation infrastructure and services, they're only incurring about 70-percent of the costs.

"The problem that we face is that the status of the Aviation Trust Fund is inextricably tied to the fortunes of the aviation industry," FAA Administrator Marion Blakey testified Wednesday. She pointed out that an estimated 52 percent of the Trust Fund revenue comes from the Passenger Ticket Tax, which is assessed at 7.5 percent of the price of a domestic ticket. "While low fares are good news for the passenger, they spell trouble for the Trust Fund with its heavy reliance on the ticket tax as its primary source of revenue."

Blakey said Trust Fund revenues are down significantly from the levels that were projected prior to the September 11th terrorist attacks. The impact of September 11th, combined with weak economic conditions and lower airfares, resulted in three consecutive years of declining Trust Fund revenues, and the uncommitted cash balance in the Trust Fund has been dramatically reduced –- from $7.3 billion at the end of fiscal year 2001, to $2.4 billion at the end of fiscal year 2004.

"The FAA needs a stable source of funding that is based both on our costs and the services we provide so that we can meet our mission in an extremely dynamic business environment.  Airline ticket prices are not related to any real measure of productivity for the FAA.  Regardless of how many operations we run through the national airspace system or how quickly we can certify new aircraft products and technologies, or how we continue to drive down the already low accident rate, the primary source of trust fund receipts is linked to the price of a ticket.  That approach will not sustain us into the future," Blakey said.

But the Georgia Congressman is skeptical about the nature of the pending Trust Fund crisis.

"That's the thing about looking into some of these agencies," Westmoreland told ANN. "You've got to really find out what kind of accounting practices they use."

"We have to look at what the Trust Fund was originally designed for," said Graves. "The Trust Fund was designed for infrastructure improvements -- to improve our airports, to fix runways, build more runways and the reliever airports. General revenue was used to fund the operations cost of the FAA. Well, now you've gotten into a system where we've seen general revenue appropriations dwindle over the years... and a shift to where we're depending on the Aviation Trust Fund to pick up the tab for operational costs. We need to get back to the way that it was originally designed."

As for claims that the Trust might be sorely depleted by the time the FAA is up for reauthorization, in 2007, Westmoreland said, "In 1999," he said, "the cost of the FAA went straight up. Now, it's been kind of level for the past six years. The revenues have stayed about the same, with a little dip in 2001. Now it's even gone back up a little bit. I'm not sure if they changed their accounting practices... or what part of what they're trying to do that's mandated by [Congress] that the government's not willing to fund."

"I would like to know what they are using to justify moving in this direction," Graves said. "What crisis is out there?"

But the subcommittee's chairman, Rep. John Mica (R-FL) seems to have already bought into the idea that something needs to change before the Aviation Trust Fund is depleted. The FAA's claims that a crisis is in the works "raises the short-term question, given the uncertainty surrounding these revenue projections and the possibility that revenues will be even less than currently forecast, what if anything should be done now to ensure the uncommitted cash balance does not reach zero before the next aviation reauthorization bill takes effect in fiscal year 2008?"

"I'm not the type of person who has a government agency come in and say 'That's the way it is, we've gotta have money.' They have to show me," said the Missouri Congressman. "I want to crunch some numbers."

FMI: www.house.gov/transportation/aviation