House Skeptical About FAA Reauthorization Proposal

The Bush administration presented lawmakers Wednesday with its plan to overhaul funding for the air traffic control system by replacing passenger ticket taxes with a mix of airline user fees and higher fuel taxes for some carriers.

Lawmakers gave the proposal a lukewarm reception at a hearing of the House Transportation and Infrastructure Subcommittee on Aviation. The panel's chairman, Jerry F. Costello, D-Ill., noted that the Bush administration projects that the new plan would generate about $600 million less in fiscal 2008 than the current system.

"I question the wisdom of moving to a new financing system that will not generate as much revenue," Costello said.

"This proposal is dead on arrival," said Vernon J. Ehlers, R-Mich.

Marion C. Blakey, head of the Federal Aviation Administration (FAA), told the panel that the changes would help finance the transition to a new, satellite-based air traffic control system in the coming decades. About $500 million to $1 billion would be required to make it operational by 2025, she said.

In lieu of collecting ticket taxes from passengers, airlines would pay user fees based on how large a plane is and how far it flies on any given trip. Jet fuel taxes for airlines would drop by approximately 7 cents a gallon, to 13 cents a gallon.

The new stream of revenue from fuel taxes would come from non-commercial aviation, such as corporate jets. Those enterprises would see their fuel taxes almost tripled, to 70 cents per gallon.

In a statement Wednesday, Transportation Secretary Mary E. Peters said the FAA plan would be a boon for consumers. "This new proposal will make flying more convenient for millions of travelers," she said.

The plan is included in a draft bill to reauthorize the FAA. The agency's current authorization expires at the end of September (PL 108-176).

The fee proposal has the cautious backing of the country's major passenger airlines, which have argued that the current system -- dependent in large part on the price of a plane ticket -- saddles them with a disproportionate share of the cost and is not tied enough to actual use of the air traffic system. They have asked for a user-fee system that would assess, among other factors, how long a plane has been aloft.

The Air Transport Association, the trade group for the country's major airlines, said it has some reservations about the proposal but views it as the "starting point" for negotiations, said James C. May, the group's president and chief executive.

The Aircraft Owners and Pilots Association, the General Aviation Manufacturers Association and the National Business Aviation Association oppose the plan, arguing that the changes would penalize them.

In a departure from what the White House has favored in the past, the draft is expected to provide $5 billion in bonding authority for the construction of new runways, airport terminals and air traffic control facilities and equipment. Traditionally, the Bush administration has not favored federal bonding initiatives for large transportation projects.

The draft also would establish a quasi-governmental entity made up of stakeholders who would decide how to spend the fee money and when a hike is needed.

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