"Tea Leaves" Portend Trouble On User Fee Issue

It's a critical skill among knowledgeable Washington players -- parsing politicians' public statements to determine what really is happening. It's called "reading the tea leaves"... and the Aircraft Owners and Pilots Association is troubled by what it sees between the lines.

"I've got to tell you, general aviation should be very concerned, based on what I heard Tuesday," said Andy Cebula, AOPA executive vice president of government affairs... and veteran tealeaf reader.

What Cebula heard was the president's State of the Union address, and Secretary of Transportation Mary Peters' speech to the Washington Aero Club. Taken together, the tea leaves say that the administration has plans for higher taxes or user fees -- or both -- for aviation.

Start with President Bush's overarching goal with federal spending: "We must balance the federal budget," he said in the State of the Union speech. "We can do so without raising taxes." And he promised to submit a budget that "eliminates the federal deficit within the next five years."

That won't be easy to do.

The Office of Management and Budget, in its mid-session review, predicts that the fiscal year 2007 deficit will be $339 billion (not counting Social Security obligations). That means that by September 30 (the end of fiscal year 2007), the federal government will have spent $339 billion more than it received.

To make a dent in that deficit without raising taxes would mean significant cuts in some federal programs -- or finding new revenue sources that would not be classified as taxes. Like user fees.

Now, consider what Secretary Peters said at the Washington Aero Club on January 23.

"We must retool and rethink our policies, and our financing, to bring them in the twenty-first century," she said. "The importance of getting a financing bill that ties revenues to costs and allows us to manage the FAA more efficiently cannot be overstated."

How do you "tie revenues to costs?" User fees would do it in the most direct fashion.

"The FAA needs a new funding mechanism, and...we must have incentives in place that will make the system more efficient and as well as more responsive to user needs," Peters said.

"That echoes an argument that user fee proponents have advanced for years," said Cebula. "Charging by flight or ATC contact would make the system 'responsive' because users would only pay for what they need and make it 'efficient' because price would control demand.

"But the FAA isn't selling widgets; it's ensuring safety," said Cebula. "You don't buy safety by the piece."

And when Secretary Peters had the opportunity to exclude the possibility of user fees, she did not.

"I know that user fees and who pays are big concerns for many of you, but we must not lose sight of the broader issues at stake," Peters told the Aero Club. "I want to ask you to focus [your] passion beyond your individual special interests to the broader challenges facing aviation and the nation."

Noting that the current FAA funding legislation will terminate this year, Peters said, "Expiration of the FAA authorization and [aviation] trust fund financing provides a once-in-a-decade opportunity to rewrite the book when it comes to America's aviation policies."

Said AOPA's Cebula (below), "This speech was undoubtedly cleared by the White House, and it gives a pretty clear indication of the administration's intent to change the current FAA funding mechanism, a system that has worked reliably for nearly four decades."

The next major indicator of intent will be the president's fiscal year 2008 budget that he will send to Congress in early February.

"We'll be able to tell precisely from those numbers if the administration is going to try to push Congress to change the source of money for the FAA," said AOPA President Phil Boyer. "With the help of our more than 409,000 members, we're going to push back -- very hard."

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