Questions Push To Change NAS Funding Methods

Unless you recently napped with Rip Van Winkle, you probably know about the looming battle over future FAA funding. Players on all sides are sharpening their tongues and quills in preparation.

Wednesday, National Business Aviation Association (NBAA) President and CEO Ed Bolen (right) fired off a missive expressing concern over comments made by FAA Administrator Marion Blakey regarding the issue.

"Some of the things said by the Administrator seemed at odds with decades of funding experience and FAA's own information," Bolen said.

Blakey's comments came in response to questions raised at a National Press Club news conference Tuesday when she spoke about anticipated changes in aviation system funding this year in conjunction with the coming FAA "reauthorization."

The FAA pays most of its bills from the aviation trust fund which is a congressional construct intended to keep the nation's aviation system running. The trust fund is periodically reauthorized by the congress -- lawmakers decide who pays what into the trust fund to keep it in the black.

Data on the FAA's website shows the trust fund's uncommitted balance has dwindled from a high in 2001 of around $7.3 billion to just under $2 billion in 2005 blaming the drop on rising cost and decreasing revenues.

Currently, the fund is kept flush with taxes on various activities including passenger tickets, passenger flight segments, international arrivals/departures, cargo waybills, aviation fuels, and frequent flyer mile awards from non-airline sources like credit cards.

The FAA has taken the position more aircraft in the system -- due in part to the proliferation of low-cost carriers and what the FAA says is a 60 percent increase in the number of business aircraft -- has increased the FAA's workload without generating more revenue. Blakey has said FAA income based on ticket taxes is dropping because of the lower fares charged by airlines.

The FAA argues it should charge for its services based on use and has suggested the best means of doing so would be a "user fee" system whereby each user pays for the particular service rendered -- get a weather brief, file a flight plan, apply for a new certificate, etc.

Bolen questioned Blakey's position on the matter arguing the fuel tax is already an ideal method of tying payment for service to system use.

"The general aviation fuel tax is a very simple, accurate and efficient way to tie revenues to costs," Bolen said. "GA fuel taxes reflect how much people fly -- the more you fly, the more fuel you burn, the more taxes you pay. However, they don't involve complicated formulas, require a big bureaucracy or turn the FAA Administrator into a tax czar. It is difficult to imagine a better funding mechanism."

Bolen also was troubled by the Administrator's contention that aviation system funding lacks "equity." Airlines argue they pay too much compared to general aviation users. The FAA says over half of its revenues come from ticket taxes, and the airlines argue that's unfair. They say general aviation aircraft are using the same system and each should pay an equivalent amount for the services they receive.

"The last FAA cost allocation study that focused on the cost each segment imposes on the system concluded that general aviation is responsible for something like 8 percent of total system costs. That is roughly in the ballpark of what the GA community is paying today," said Bolen. "For over a year, NBAA has repeatedly asked the Administrator to discuss with us any updated information the Agency may have on this issue, but those requests have been denied."

There's no question in which direction the FAA is leaning when it comes to future funding for its trust fund... the agency clearly wants to institute a system of user fees. The NBAA, the AOPA and other organizations representing general aviation are obviously unhappy about that and are urging their memberships to get involved.

"The businesses and communities across the country that rely on general aviation should be very concerned about the latest comments from the FAA," Bolen concluded. "We hope the Administrator will revisit these issues before the FAA reauthorization proposal is submitted to Congress."

FMI: www.nbaa.org, www.aopa.org, www.faa.gov