FAA Causes Uproar With Tax Talk

With more planes in the sky, the agency and the airlines are pushing to end the ticket tax and find a way to redistribute the burden of funding air traffic control.


Most airline passengers pay their 7.5 percent ticket tax and continue about their travels.

Little do they realize that throughout aviation, people are gearing up for a knockdown, drag-out fight over whether and how to replace the ticket tax, which generates most of the money in a $10.2 billion trust fund.

Back when major airlines dominated the industry and people paid full fare for business travel, the ticket tax easily supported air traffic control and airports.

Now the Federal Aviation Administration sees travelers migrating to low-fare carriers, regional carriers and private jets. The FAA wants to overhaul its funding to support this new mix of traffic.

To explain the trend in the most simplistic terms, 300 people who used to cross the sky in one big plane are now likely to be divvied up among major airlines, regional jets and even private jets.

For the FAA and its air traffic control towers, that means more blips on the radar, but the tax base to support the work -- resulting from the tax per passenger ticket -- is the same.

The FAA has been watching this trend for several years but is pushing Congress for a change now because its taxing authority expires Sept. 30.

"It is the issue for airports and aviation in general," said Fredrick "Rick" Piccolo, chief executive of Sarasota-Bradenton International Airport.

The potential overhaul has pitted small aircraft and business pilots against the airlines.

The airlines want a new financing scheme that will redistribute the tax burden and allow air traffic control to safely handle more planes.

Independent pilots, who pay fuel taxes, say the burden created by smaller planes is overstated. They have vowed to fight any new schedule of fees, which they say would make flying small planes and jets an elitist enterprise.

The FAA has not yet made an official proposal, but the rhetorical war is well under way.

For example, Phil Boyer, president of the Aircraft Owners and Pilots Association, told his 409,000 members in a New Year's letter that one of his resolutions is to "Stand by to smash user fees."

"User fee" is the catch-all reference to a proposal by the Air Transport Association to end the ticket tax and redistribute the burden among all types of aviation users. The ATA wants a system of charges that "directly and proportionally" links system use with system costs.

Right now anyone who gases up a piston-engine plane or a jet for private use pays a fuel tax, while charter and fractional jet services collect and pay the ticket tax.

Although the smaller jets are paying, each blip that they create on the radar comes with fewer passengers, and therefore less tax revenue.

The National Business Aviation Association is with the Aircraft Owners and Pilots Association in the fight against user fees.

Their message is reaching members like Larry Harvell, a private pilot who flies a single-engine plane out of Sarasota-Bradenton International.

"Most pilots are aware of it and are dead-set against it," he said.

Airports have a stake in the battle, too. As ticket tax revenue flattens, the FAA dips deeper into the trust fund, which provides matching grants for airport upgrades, to cover its operating expenses.

"The air traffic portion of that keeps growing," Piccolo said. "It could be you need the whole trust fund just to pay for FAA operations."

Piccolo is chairman of the Airports Council International in North America, which is still working out its position on the FAA's reauthorization. The board of directors is scheduled to meet on Longboat Key on Feb. 2.

Because ACI represents major airports, which serve the airlines, the group will likely favor a change.

The proposal the FAA finally issues will likely be a compromise, said Robert Poole, director of transportation studies at the Reason Foundation, a libertarian think tank.

The straight pay-to-play fees the airlines want would be too extreme, he said. The FAA will probably spare the independent pilots any new expense, Poole said.

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