No Consensus Yet on Aviation Taxes As FAA Deadline Nears

The Senate Finance Committee Thursday began grappling with how to fund a transition to a new air traffic control system, though no consensus has yet emerged with less than three months left to act.

The Finance Committee must decide whether to adjust fuel taxes on commercial and general aviation aircraft to help pay for a multibillion-dollar, multi-decade transition to a new air traffic control system. The issue is being debated as part of a larger measure to reauthorize the Federal Aviation Administration (S 1300).

"We will find a solution that I expect will be one that not everybody's going to love, but the hope is it's one that everybody will recognize as reasonable," said Finance Chairman Max Baucus, D-Mont.

But the longer it takes Finance to act, the more nervous stakeholders become about the feasibility of enacting a measure before the FAA's current authorization (PL 108-176) expires at the end of September. Expiring with it will be the fuel and ticket taxes that fund most of the federal aviation system.

"Some Finance aides had been talking about a markup in September, the same month the authorization expires, which is sure to mean an extension," one transportation lobbyist said.

For much of the past year, commercial and general aviation stakeholders have been at odds over whether to continue funding most of the aviation system with the current scheme of ticket and fuel taxes, or institute a new structure of fees more closely tied to actual usage of the system.

General aviation interests, which stand to pay more under most user fee proposals, say the current system of excise and ticket taxes works fine and that user fees proposed by the administration (HR 1356) amount to corporate welfare for airlines. Commercial airlines argue that the status quo saddles them with an unfair share of air traffic control costs compared with what general aviation pays.

Sen. John D. Rockefeller IV, D-W.Va. chairman of the Senate Commerce, Science and Transportation Aviation subcommittee, came down strongly on the side of the commercial airline industry, saying its passengers should not have to "continue to subsidize corporate jets."

Rockefeller said if warring stakeholder groups cannot come up with a consensus funding solution to the modernization puzzle, he will "address the equity issue by looking for ways to limit the access of general aviation to congested airspace."

Sen. Trent Lott of Mississippi, ranking Republican on the aviation panel, said everyone wants air traffic control modernization, but without paying anything extra.

"For all of you laying over in the weeds saying 'I'm gonna get my part no matter what and by the way the airlines are going to pay for it,' forget it. We're going to have a fair bill or no bill and I'm prepared to go to the mat," Lott said.

Given their service on both Finance and Commerce, Rockefeller and Lott will be highly influential in shaping the financing package for the aviation bill.

Source: CQ Today Round-the-clock coverage of news from Capitol Hill. ©2007 Congressional Quarterly Inc. All Rights Reserved.