The Bush Administration rolled out its FY2007 budget plan early last month, calling for $13.75 billion for the FAA–down from the $14.31 billion for this fiscal year–and doling out a big hit on general aviation airports. Although the proposal does not yet call for user fees, Transportation Secretary Norman Mineta warned that the agency will have to “relate revenue sources to the services being provided,” such as ATC.

He contended that the President’s budget continues to support research technology and provide record investments in the nation’s transportation infrastructure.
“At the same time, the budget reflects the recognition that our funding mechanisms for making transportation investments are outdated,” Mineta said. “And there is a growing consensus that the traditional gasoline taxes and airline ticket taxes are not adequate to the task of supporting 21st century transportation needs.”

He warned that the taxes that finance the Airport and Airway Trust Fund will expire at the end of FY2007 on Sept. 30, 2007. Currently the primary funding source is tied to the price of an airline ticket, but he said there is “general consensus that our growing aviation system needs a more stable and predictable revenue stream, one that creates a more direct relationship between the revenues that are collected and the service provided.”

Mineta said the Bush Administration will present a reauthorization plan that will include “a solid forward-looking financing proposal for the aviation trust fund.” Meanwhile, the FY2007 budget provides the FAA with $13.7 billion from a combination of the aviation trust fund and general fund revenue sources.

Of that total, $8.366 billion will address the FAA’s operational needs and pay for hiring FAA safety inspectors and replacing retiring air traffic controllers. It will provide for 194 inspectors and other safety personnel and 1,136 new air traffic controllers to offset retirements expected next year.

Mineta said that an additional $2.75 billion is provided for the Airport Improvement Program (AIP) grants, which “were instrumental in helping restore service last year to several Gulf Coast airports shut down by Hurricanes Katrina and Rita. He said the airport construction grant request for next year–nearly $800 million less than Congress enacted for FY06–is “sufficient” to address construction needs for all currently planned runways and “meet our goal” for improving runway safety.

The same scenario played out last year, when the White House proposed a $500 million cut in AIP funds from the $3.5 billion enacted in FY2005. But Congress later refused to go along with the Bush plan and restored the money.

On a brighter note, Mineta said his department’s budget provides $122 million for the next-generation air transportation system (NGATS) initiative, and he added that early progress in the multi-agency effort is “encouraging.” The DOT budget package also includes $80 million for automatic dependent surveillance-broadcast (ADS-B), a technology that will replace ground-based radar systems and revolutionize air navigation and surveillance.

In addition, the budget provides $24 million for system-wide information management (Swim), which will make a network-enabled air traffic system possible. Both ADS-B and Swim are building blocks of the NGATS. The proposed budget also provides $2.503 billion for facilities and equipment and $130 million for research, engineering and development.

General aviation organizations expressed dismay at President Bush’s proposal.
“The White House is proposing to cut nearly $1 billion from the Airport Improvement Program in 2007 compared to the amount established by Congress [in 2003], and almost all of that would come from money earmarked for GA airports,” said AOPA president Phil Boyer. “Congress must not allow this to happen.”

A ‘Shortsighted’ Plan
Under AIP funding formulas, when AIP funding drops below $3.2 billion, all “entitlements” for general aviation airports are eliminated. That means almost all of the money would go to large airports.

National Air Transportation Association (NATA) president Jim Coyne said reducing the AIP funding from the $3.7 billion congressionally authorized for FY2007 would have a disproportionate effect on general aviation businesses and pilots.

Many of the cuts, said NATA, including a complete elimination of the Small Community Air Service Program, will stifle air service to rural America, where air transportation is the most efficient means of travel.

Both organizations said they are concerned about any new plan to fund the FAA. Although the President’s budget does not call for implementation of user fees in FY2007, the Administration has left the door open for the introduction of fees in the future.

Airports Council International-North America (ACI-NA) president Greg Principato called the cuts in AIP funding shortsighted, especially at a time when record levels of passengers and cargo are moving through the U.S. aviation system. He also blasted the Bush Administration’s plan to cut the FAA’s facilities and equipment budget from the authorized level of $3.1 billion to $2.5 billion.

“The Administration’s recommended levels for both the AIP and the facilities and equipment account are inadequate,” he said. “Given that ACI-NA has projected total airport capital needs at $14.3 billion per year for the next five years, these reductions mean that airports will have a harder time upgrading facilities to meet demands.”

Mineta said the administration is aware of general aviation’s sensitivity to “what they would refer to as user fees” and is cognizant of GA’s concerns. “I don’t think they expect a free pass nor are we going to dump the whole boatload on them,” he said. “I don’t think that we can say right now that it will be devoid of user fees. On the other hand, they are paying them right now, in effect.”

FAA Administrator Marion Blakey said the agency expects to have a proposal for new funding up on Capitol Hill this spring “in the March or April time frame.” She said the first part of FAA reauthorization is a 10-year bill largely on financing the trust fund. The second part would be a four-year bill looking at FAA programs.