Proponents of Excise Taxes over User Fees headed into the Independence Day holiday week with a sense of accomplishment after leaders- Democrats and Republicans- alike — of both the influential House Transportation & Infrastructure Committee and its Aviation Subcommittee — sponsored and cleared the FAA Reauthorization Act of 2007 before Congress recessed for the holiday. And across the board- general aviation ...
FAA Reauthorization Update
After two periods- progress made - but progress yet to go.
Proponents of Excise Taxes over User Fees headed into the Independence Day holiday week with a sense of accomplishment after leaders- Democrats and Republicans- alike — of both the influential House Transportation & Infrastructure Committee and its Aviation Subcommittee — sponsored and cleared the FAA Reauthorization Act of 2007 before Congress recessed for the holiday. And across the board- general aviation groups found plenty to like- and only a little to fear- causing their respective leaders to express universal acceptance of the proposed law.
Of course- they all also acknowledged the uncertainties of the road ahead – much mileage and many hills must be conquered before the bill becomes a single coherent piece of legislation bound for the White House and the president’s signature. And even upon arrival- the pre-holiday win may not secure the presidential approval needed to make it law.
Like the leaders of the aviation alphabet groups noted: Differences exist between House and Senate proposals – and at least one item amended into the House bill already faces a veto threat by the president. Nonetheless- the House bill bore all the hallmarks of what users and supporters of private aviation sought and none of the new user fees so ardently sought by the FAA and the airline industry. And it’s been a dirty fight.
House & Senate: So close- yet…
Several weeks before the House action- the Senate Transportation & Commerce Committee cleared out of hearings its own take on FAA reauthorization – and it came so close to emerging user-fee free… but not quite- and not quite so friendly otherwise. The problem with that bill stems from its proposal for a $25 per flight IFR fee on turbine aircraft. That amendment survived a push to eliminate it by one vote – from Alaska Sen. Ted Stevens. Stevens voted last and commented on his discomfort over the fee.
Opponents of the user fee at any and all levels of application express some optimism that the fee will die later in light of the overwhelming opposition of Alaskans – the state with more private aircraft and more general aviation operations per capita than any other state.
But- as one association executive noted- the House “got it right.” The House bill does retain and raise fuel taxes as the source of revenue from general aviation operations. Excise taxes on aviation gasoline will increase 4.8 cents per gallon to 24.1 cents- while the tax on Jet A will increase 8.9 cents to 30.7 cents per gallon.
The House bill also increased fees for some FAA services – something expected since members of Congress learned that the FAA has long stuck with fees lower than the costs of the services provided.
In addition- the House bill provides higher funding levels for ATC modernization – known as NexGen – for airport improvement and for tracking the FAA’s progress on high-tech programs.
While taken in whole- this bill spells higher tabs for an aircraft registration- a pilot’s license and a medical certificate; no GA groups expressed a major problem with the changes. In fact- from AOPA to NBAA- NATA to GAMA- the word was overwhelmingly supportive of the House bill.
Bogus Pitches and Mythical Toons
No one expected the airlines’ trade group- the Air Transport Association (ATA)- to argue any of general aviation’s side – save- possibly- for the concurring desire both communities share for a modernized- technically advanced air traffic control system and procedures. On those points- ATA and the general aviation groups agree – right up to James May- ATA president- and Phil Boyer- president of the 412-000-plus AOPA.
But general aviation interests expressed shock and anger at a set of animated advertisements ATA ran on CNN’s networks geared to the screens of airport terminals. The spot sported talking cartoon airliners lamenting how there are many times more general aviation aircraft than airliners and linking those numbers to airline flight delays – a patently false claim that should not have cleared the network. One of the spots even features a talking business jet that muscles its way to the front of a lengthy takeoff queue while telling the airliners they’ve got to clear out of the way – “I’ve got a foursome in the back with an early teatime-” the jet says. Another bit of myth promoted as fact. Think about this – when was the last time (if ever) your flight received priority sequencing over awaiting airliners. You know it never happens; the airlines know it never happens; not all passengers know- though.
All this desperation and deceit reveals the urgency with which the airline industry feels compelled to propose a tax regimen that shifts nearly $2 billion in payments away from them and their passengers and about $1.6 billion of that on to the backs of private pilots and private aircraft owners.
Revealed in February- the FAA’s proposal seeks to do exactly as the airlines seek – under the expressed claim that without a radical shift on funding mechanisms and control of ATC fees- ATC modernization is doomed to fail for lack of finances. Someone should have paid closer attention – the FAA’s own proposal actually generated $600 million less than projected by simply leaving taxes as they exist now. It sort of undercuts the desperate claim of impending poverty when you cut your own income to accomplish a shift in tax burden.
The FAA proposed to end the airline ticket taxes- quadruple general aviation fuel taxes- increase fees on a variety of services and certificates- and institute all-new fees for a variety of services now covered by the excise taxes passengers- pilots and airlines pay.
Concomitant to the tax changes were to be the establishment of an all-new bureaucracy to track and invoice those who owe fees- collect their payments distribute the funds and account for it all: A new division within FAA- with new people- along with new authority to change fees as needed- and new industry control over the modernizing ATC.
The ATA claims that the workload for handling a Lear is the same as for handling a 747. This ignores years of precedents for taxing transportation assets according to their capacity – in this case the number of passengers – just as landed weight generally controls airport fees for commercial carriers.
This discredited idea would levy the same air-traffic fees on a business jet carrying five as an Airbus A380 carrying 500. In other words- the five on the private- non-commercial flight would individually pay dramatically more than each of the 500 flown on the commercial- for-profit flight. Such is the underlying goal of “a blip is a blip.”
All in all- not pretty for general and business aviation - which makes the House proposal all the sweeter.
Compromise & Conclusion
Next for the House bill is a series of stops in other committees- with the Ways & Means panel coming next. Ways & Means is the tax-writing committee of the House and- if the Transportation panel’s numbers hold up- Ways & Means may refer the bill without change – unlikely as it is that there will be no changes proposed.
From Ways & Means- the bill has at least one more stop: the Rules Committee which will decide whether the bill goes to the full House and under what conditions of debate and amendments.
On the Senate side- the bill already in play still awaits action by the Senate Finance Committee that chambers taxing panel. Again- modifications are likely – with one of them being the elimination of the $25 IFR filing fee. Ultimately- both chambers must vote out a bill – and ideally- it would be the same bill approved by both chambers- clearing the way for the law to go to the president for his signature.
A more likely scenario is that bills with different language clear each chamber’s floor – which means both bills go to a Conference Committee where lawmakers work to resolve differences before sending the compromise bill back to each chamber for final approval. Only then would the bill be ready for the president’s signature. And for the FAA to have the authority and revenues to operate on October 1- work on this reauthorization law must be done by midnight September 30.
Voices heard only when they speak
From Ed Bolen at NBAA to Pete Bunce at GAMA- from Jim Coyne at NATA to Phil Boyer at AOPA- the message remains identical: business and general aviation users should continue to make their feelings known to their lawmakers.
“Nothing is more worrisome than the thought of pilots thinking the House victory is the end of the process-” one aviation-group lobbyist told World Aircraft Sales Magazine.
Instead of falling silent- all the groups involved suggest continuing polite- pointed communications with your House member and both Senators from your state. The House bill is H.R. 2881. It’s a simple message with the potential to keep flying as free of fees as anyone can hope.
“The message we want people to send is simple-” said the lobbyist: “Tell your lawmakers to support the House bill.”