"A Civil War Erupts Over FAA's New Funding Proposal in Washington"

Friday, March 30, 2007

A Civil War Erupts Over FAA's New Funding Proposal in Washington
By Angie C. Marek
U.S. News & World Report


On February 14, the day the Federal Aviation Administration proposed a new
funding plan for the entire agency, JetBlue Airways was experiencing a
meltdown of epic proportions: Flummoxed by an ice storm, nine of its planes
sat on the runway at New York's John F. Kennedy International Airport,
passengers stranded inside, for six hours or more. The JetBlue incident, of
course, was a debacle. Depending on what you believe, the FAA's
revolutionary funding proposal was a bit of one, too.

There's a reason, though, for revolution. In the next decade, demand for air
travel is expected to triple. At the same time, the Aviation Trust Fund,
which currently pays many of the costs associated with running the FAA's air
traffic control, is at all-time low. The agency is also trying to upgrade to
using the global positioning system, which would allow it to better manage
congestion and avoid air traffic gridlock. Its new funding proposal, the FAA
says, will enable that.

"It is absolutely a crucial turning point, not just for the FAA but for
future of our entire aviation system," Marion Blakey, the top official at
the agency, tells U.S. News. "We're at the pivot point where either we
decide to make a solid, sustainable commitment to the [upgraded
next-generation] system ... or we miss that opportunity altogether."

However, skeptics and members of the general aviation community-those who
use small planes and business jets-are howling over how the FAA plans to get
there. The agency has proposed abolishing the 7.5 percent tax on airplane
tickets that currently makes up about half of the money going into the
Aviation Trust Fund each year and replacing it with a more than 200 percent
increase in taxes on most aircraft fuels, as well as special fees for planes
using domestic airspace.

The agency also wants to charge general aviation fliers each time they land
at one of the top 30 major U.S. airport hubs. Those same pilots will also
pay more to upgrade, renew, or request a duplicate copy of their pilot's
licenses.

FAA officials say their proposal will answer a fundamental problem: The
ascent of low-cost carriers like Southwest Airlines has made ticket taxes
not as profitable or dependable as they once were. Business aircraft,
meanwhile, have become more prevalent in the skies in recent years, while
not picking up a representative share of the trust-fund contribution.

The proposed changes would be seismic for the general aviation community,
which fought off a similar bid to create user fees in 1997. These days they
don't pay to use domestic airspace. Costs for pilot's licenses and renewals,
typically about $5, would also jump to $120, a sum FAA officials say just
covers the processing costs.

"We're getting letters and phone calls every day from our members-the
small-community businesses in places like Hines County, Miss.,-telling us
these fees will force them to give up flying all together," says Ed Bolen,
president and CEO of the National Business Aviation Association, who
compares the tensions in the aviation community now to "a civil war in
Washington."

Republican Sen. Jim Inhofe, a longtime GA enthusiast, has estimated about 88
percent of small-plane pilots would stop flying under the new system;
Bolen's organization emphasizes that 70 percent of fliers using GA for
business purposes own tiny turboprop or piston aircraft, "not fancy business
jets, like FAA would have you believe."

So far it looks as if such arguments are resonating. In the House, Rep. Jim
Oberstar, chairman of the House committee handling the proposal, said last
week he hoped to give the proposal "a proper burial." One Republican on his
committee, Rep. Vernon Ehlers of Michigan, called the FAA's scheme "dead on
arrival" at its first hearing.

"I'm not even convinced that the current funding system isn't sufficient to
fund the [air-traffic upgrades]," says Rep. Jerry Costello, who chairs the
House's aviation subcommittee. Government Accountability Office reports, he
adds, indicate that for the first year at least, the FAA would actually get
$600 million less under the new plan than the current one. From fiscal years
2009 to 2012, the GAO estimates the FAA would get $900 million less. Blakey
denies the proposal would short-shrift the FAA.

Members of Congress are also skeptical of a new 13-member outside advisory
board that would advise the FAA on fees. That board could raise some of the
rates based on the FAA's needs or to reduce some congestion. Critics say it
makes the agency less accountable to Congress-and possibly less worried
about possible cost overruns during modernization.

Some outsiders argue, however, that the strong rejection of the FAA's idea
is helped along by the enormous influence the GA and business aviation
communities wield on Capitol Hill. The Aircraft Owners and Pilots
Association, which represents more than 410,000 hobby fliers, is lobbying
aggressively against the idea. It contributed more than $1.8 million to
election campaigns in the 2006 cycle alone, including $10,000 each to
Oberstar, Costello, and Ehlers. AOPA has also spent more than $11 million on
lobbying since January 2005.

The FAA, meanwhile, isn't giving up easily. Blakey says she believes the
proposal "absolutely does have a very high probability of becoming law." And
there are some signs the Senate is a bit more open to the user-fee idea.
Sen. Jay Rockefeller, who is working on a funding bill, has said he's "not
offended" by the concept of user fees and knows "that the status quo
[funding scheme] is not good enough." Rockefeller is expected to propose an
FAA bill by the end of April. If a law isn't passed by the end of September,
the current ticket-tax system expires with nothing to replace it, meaning
FAA funding shortfalls.

"We all agree that we need more money, and you all are saying, 'No, not
me!'" Sen. Trent Lott, who's working with Rockefeller, told a group of GA
and commercial-aviation leaders recently. "That's just not the way it's
going to happen." Bluster, sniping, and lobbying, be damned.

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