User Fees May Not Be Dead
Although user fees were debated on Capitol Hill in the 2007 and 2008 time frame, NBAA president and CEO Ed Bolen says they never seem to go away and remain a significant threat in the current environment.
Back then, user fees were the subject of lobbying campaigns by both the airlines and the Bush Administration, he recalled, and the business aviation community responded vigorously to those challenges. “And after a full and thorough debate, I think it would be fair to say that the vast majority of Congress agreed with our position, which is that fuel taxes work, user fees don’t,” Bolen said. “Or said another way, anything a user fee can do, a fuel tax can do better.”
What the business aviation community saw during this past summer’s debt-ceiling debate, however, was that one side said, “Absolutely no new taxes,” and the other side said, “Absolutely there needs to be new revenues.”
“I think it was in that environment that we heard rumors to the effect that said some type of per-flight fee–what we think of as a per-flight tax–was being bandied about,” Bolen explained. While the ultimate compromise that was reached on the debt ceiling did not include any user fees, which he termed a very positive sign, he cautioned that the new deficit “super committee” is going to look for ways to reduce the size of the deficit, either through spending cuts or revenue increases, or some combination of the two.
No Foreign-style User Fees
“We as a community, I think, are concerned about that idea, that user fees could be put on the table,” he said. “Our community has always said–like any community–that we don’t want to pay any more than we absolutely have to, but we do recognize a responsibility to contribute to the system. We believe that the fairest, the simplest, the best way for us to move money from our industry to the federal government is through the fuel tax. We want to pay at the pump.”
General aviation, and specifically business aviation, doesn’t want foreign-style user fees or the bureaucracy that comes with them, he stressed. “So our hope would be that over the course of the next several weeks and months in the legislative process, and with the new super committee, to have the opportunity to make our views known,” Bolen said.
On a cautionary note, he quoted Senate minority leader Mitch McConnell (R-Ky.) as saying he thought this new super committee would have more power than any congressional committee over the past 50 years.
The Barr Program
On another controversial topic, Bolen was asked about industry support for the Block Aircraft Registration Request (Barr) program and its court status. “Our expectation is that the entire legal process should conclude somewhere in the January time frame,” he said. “And I think we feel optimistic about our chances; we feel it’s a strong case.”
Bolen acknowledged that NBAA and AOPA have received a number of contributions for the legal defense fund from individual companies and from a number of organizations. He said that NBAA is particularly pleased by the number of local, state and regional associations that have made contributions to the program. “I think these contributions are important both from a financial aspect, and also because they underscore the level of concern and the breadth of concern that is being felt within our community,” he said.
According to Bolen, about 700 comments were received when the federal government’s plan to severely limit the Barr program was printed in the Federal Register, and about 690 of those were opposed to the changes. He noted that the House of Representatives added language to the FAA reauthorization bill that would prevent the Obama Administration from carrying out its plan to restrict participation in Barr to those who can verify a security concern. In addition, senators and representatives have sent letters to transportation secretary Ray LaHood expressing objections to the DOT plan. “Congress has clearly made their position known and it’s a position of opposition,” Bolen said. “They have not been able to turn their opposition into a federal law yet because the underlying FAA bill has been mired in other controversies.”
On another front, Bolen said NBAA is opposed to the European Union’s plan to institute an emissions trading scheme (ETS) because “we think business aviation has been singled out for unfair treatment.” He explained there are exceptions and credits that are part of the ETS where stationary emitters are given credits or are exempted below certain outputs, whereas business aviation does not have any exceptions and does not have any credits.
“They may say, ‘Gee, we can have a coal plant in Europe, and even though it is right here in Europe and everybody can walk by it and see it emitting x-number of tons per year, we have determined that’s not a significant enough amount that we are going to go tax that chimney,’” he said. “Nevertheless, when an airplane from the U.S. flies over, and you look at our total footprint, and it is substantially less than that stationary chimney, we’re going to pay for all of that. So I guess the question is: why are some groups given credits or exemptions, and our community is not?”
NBAA’s position, Bolen said, is that the International Civil Aviation Organization is the appropriate body to address this, and having a patchwork of emissions schemes around the world does not make any sense.