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FAA Funding Crisis A Hoax(?): AOPA

AOPA President Phil Boyer says the FAA's justification for imposing user fees is just hot air. Boyer told the American Association of Airport Executives meeting in San Diego last week that, far from going broke, the Airport and Airways Trust Fund is awash in cash and will have billions in the bank in coming years. AOPA says it crunched the numbers using White House estimates and, using its most conservative forecast, predicts the trust fund will have a $4.3 billion surplus by 2011. By its most liberal interpretation, the surplus could reach $9.3 billion. FAA Administrator Marion Blakey says the trust fund, which is derived from a percentage tax on airline tickets, is a declining source of revenue and she wants a revenue stream that's based on the cost of services provided (definition: user fees). But AOPA maintains that, contrary to FAA statements, airfares are on the increase and more people are traveling (hence the trust fund must be getting more money, too). Boyer says the real issue is control and the airlines want it. As the largest contributors to a user-fee system, the airlines would carry most of the clout in decisions regarding function of the air traffic control system. Congress would no longer have oversight because taxes would not be used to fund the system. Boyer said the airlines have proven they can't run their own businesses and they shouldn't be allowed to control the airspace. He also noted that ATC costs in the U.S. are the lowest in the world and the U.S. system is the safest.

Bill Aims To Fix Fuel Tax Quagmire

The National Air Transportation Association (NATA) and the National Business Aviation Association (NBAA) say legislation aimed at solving a mythical problem has caused some real concerns for fuel dealers and, believe it or not, has resulted in taxes on jet fuel being pumped into a trust fund for highway improvements. New legislation (S.2666, which has not yet been posted on the Library of Congress Web site) has been proposed by Sen. Conrad Burns (R-Mont.) that will put a stop to the bizarre arrangement until 2007 when all aviation fuel taxes expire and must be reauthorized, anyway. Last October, new rules went into effect that were designed to discourage the use of jet fuel, with its slightly lower taxes, in car and truck engines. The fuel tax on airplane fuel is 2.5 cents per gallon less than it is for truck-stop diesel. To prevent the diversion of the slightly cheaper jet fuel to cars and trucks, the government decided to make aviation fuelers charge the full tax rate and then apply for reimbursement of the difference. Not only that, the taxes on the jet fuel are deposited to the highway trust fund until the aircraft fuelers applied for their rebates. It gets worse. According to NATA, few, if any aircraft fuelers have been qualified to get the tax rebate so most have given up trying. That means they're passing the higher taxes to their customers and all that tax money is piling up for highway projects. NATA President Jim Coyne urged quick passage of Burns' bill to keep the mess from getting any worse. "The longer Congress waits, the more aviation businesses suffer while more money drains from the Airport and Airway Trust Fund," Coyne said.