The FAA Funding Debate
The FAA Funding Debate
As it is now, the FAA funding debate is stalled because of lack of agreement among the major players, namely the Federal Aviation Agency (FAA) and Department of Transportation, big airlines, the White House, and General Aviation (GA). What does each one of them specifically want? The FAA wants the application of user fees so that it will be possible to match the revenue generated to the costs incurred. It also wants the elimination of the congressional control that oversees how the agency spends the money it receives. Furthermore, it also want the pilots to pay directly for all FAA services.
The airline industry on the other hand wants GA to share the cost of supporting FAA, as the share of the airline industry is around $10 billion from a yearly budget of $14 billion. The industry also wants to have undisputed control over the air traffic control system and wants to have a say as to how the airspace would be put to use. The White House wants the introduction of user fees in order to avoid using tax revenue for non-aviation uses. The General Aviation takes things a notch further and focuses on a robust aviation system that is available for everyone, not only for those who are wealthy (AOPA Online).
The main question unanswered currently is to find out if FAA needed more money to do its job properly. Another required further probe might also be to examine if the current tax system is broken and if not why complicate things by coming up with new provisions. There is also dispute about who is going to cover the cost of the FAA or how to do it equitably without forcing anyone to take the brunt. Once the above mentioned issues are addressed there will remain a key question as to who would have the control of the airspace.
While the above concerns were in the process of being addressed what complicated matters was the Senate came up with a bill based on the proposal made by Senators Rockefeller and Lott (AIN Online, 2008). What the bill proposes are the following:
· Turbine-powered aircraft utilizing controlled airspace should pay $25 per-flight fee.
· Giving the airlines a break by eliminating the 4.3-cents per-gallon tax on fuel.
· Raising the fuel tax on Jet A fuel aircraft that are for noncommercial use to 49 cents.
· To form a new board made up of industry experts and government officials to be in charge of the spending FAA conducts from the Airway Trust Fund, where the money raised using the above methods would go into.
· Eliminating the control congress has on FAA by allowing it to set fees and spending by its own (AOPA, 2008).
Where Does the Airline Industry Stands?
The industry had attacked the proposed FAA financing by calling it a ” manufactured crisis based on flawed financial assumptions about the viability of the current funding system and the cost of the ‘NextGen’ air traffic control system.” Furthermore, AOPA president Ed Bolen had said that the new measure the government wants to introduce would transfer the safest air transportation system into private hands, because it might not be viable (Aviation Week, 2006).
According to the airline industry the attempt is to find someone else to carry the cost of funding the FAA and the preferred entities to oversee the spending in this case seems to be unselected bureaucrats and FAA executives instead of congress. According to him, the measure would not save the FAA any money. In fact, it directly affects consumers, pilots of the general aviation, including all comminutes that rely on the air transport system one way or another.
The FAA on the other hand justifies what it is doing by claiming that all the measures it is taking are keeping in mind the next generation air traffic control system modernization projects. Bolen is still adamant by saying that the current tax system can fund that, where the new proposal could fall short by $600 million. The Department of Transportation projection on the other hand shows that the current funding in place would raise more than $20 billion through 2012 for the funding FAA needs for its facilities and equipment account.
In light of this, the airline industry has continued its attack on the proposal by defying what the authorities are calling tax relief by saying that although it might not be consumers who are paying the user fees, someone has to pay it. What would be achieved through the recommended process is shifting the burden among various groups and the reason for that should be blamed on the agency that has a history of mismanaging and overspending funds on large projects that were not feasible.
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 28 September 2016
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