With one congressman calling it “dead on arrival,” the FAA yesterday released its new proposal for financing the agency over the next 10 years, a plan that would more than triple general aviation fuel taxes, from 21.8 cents per gallon to 70 cents per gallon, and create a mishmash of new and/or higher fees for such things as pilot licensing, aircraft certifications and other services.
Business aviation groups welcomed a letter from the FAA assistant administrator for aviation policy to the commissioner of the Internal Revenue Service asking him to suspend implementation of new fuel tax rules that would impose a “significant administrative burden” on general aviation businesses and “create financial risk for the Airport and Airways Trust Fund.” The new rules would raise the tax rate on jet fuel to that of costlier highway di
The Bush Administration is requesting $14.1 billion to run the FAA in Fiscal Year 2008 (beginning October 1), with general aviation–and in particular business aviation–continuing to pay fuel taxes as opposed to user fees as its share of operating the agency. “General aviation feels it is administratively much simpler paying at the pump,” FAA Administrator Marion Blakey said yesterday when the FY2008 budget was unveiled.
Leaders of three general aviation organizations went on the offensive yesterday in response to an Air Transport Association plan that would place a tax (read user fees) on the number of “departures” and “time in system” and give the airlines the most influence among ATC system stakeholders.
To lift what NBAA and the National Air Transportation Association call “confusing” and “burdensome” requirements from FBOs and fuel companies, Sen. Conrad Burns (R-Mont.) introduced the Aviation Fuel Tax Simplification Act. The act would temporarily suspend part of last year’s Transportation Equity Act, which requires all aviation jet fuel taxes to be deposited into the Highway Trust Fund.
After promising that a new system for funding the FAA would be announced by late last spring, the White House admitted this summer that internal disagreements within the Bush Administration had pushed the project to a back burner.
Canada's private, user-fee-based ATC system–Nav Canada–believes that general aviation operators are double-charged for use of Canada's aviation infrastructure and that fuel excise taxes should be reduced.
"Business aviation should support the shift to user fees," urged Reason Foundation director of transportation studies Robert Poole, "if it is part of a comprehensive reform of ATC." He said user fees would enable the costly switch to a "network-centric" (more technology-based) ATC system that in his view would offset increased costs with potential savings from increased flying efficiency and fewer delays.
As the FAA wrestles with how to generate a stable and predictable revenue stream to fund its operations, the head of the Air Transport Association (ATA) went before a Senate panel to request a one-year reprieve from the 4.3-cent federal tax on jet fuel.
The National Association of State Aviation Officials (NASAO) is urging Congress to resist all attempts to “raid” the Airport and Airway Trust Fund, including airline industry calls for new tax breaks, and the National Air Transportation Association (NATA) reiterated its preference for having general aviation contribute to the fund through taxes on aviation fuels.