Friday, June 1, 2007
I Need A Price Check On Runway 6, Please
User fees have the potential to significantly change the way we fly
|On February 5, 2007, President Bush released his 2008 fiscal year budget. Fears of how the budget would affect aviation came to fruition with a proposed budget cut of $1 billion off of the present funding level of $14.3 billion. A week later, the government declared that they’d be looking for a closer matching of costs to benefits; additionally, they recommended increases in the fuel tax and the implementation of several user fees. To make matters worse, if the budget goes through as presented, general aviation will be at war with commercial aviation about who and how much each side will have to pay for the right and privilege to fly. And the clock is tickling—funding for the FAA expires on September 30, 2007.|
The proposed 2008 budget doesn’t stop with just increasing the fuel taxes. When you cross into Class B airspace, what’s the first thing that happens? You link up with a controller. Under the proposed budget, a user fee for this service will be charged to the pilot. How it will be charged and how it will be collected is anybody’s guess at this moment. And that’s a problem with the proposed budget. Nobody has given us an answer as to who will determine fees on certain services and how those fees will be collected.
User fees could be charged to the pilot when the FAA issues a private-pilot certificate. Registering your aircraft with the FAA would also be a service for which the FAA could charge a user fee. Preflight services and landing fees are other targeted areas that would likely be provided for a charge.
When you look at how much other countries charge pilots for these services, U.S. pilots have had a nice deal. Some countries even charge for the administration of the private written exam. But I’m not sure how long this advantage will last.
These are all fees that could potentially meet the goal of revenue neutrality for the budget, along with the excise taxes charged to passengers flying on commercial airlines. I once set up a 19-day business trip. During those 19 days, I went from Orlando to New York to Brussels to Madrid to Singapore to Sydney to San Francisco and back home to Orlando. The cost of the flight itself was just under $10,000. The excise taxes were another $350 or 3.5%. Who’s paying this excise tax? Is it the airlines or is it me? The bottom line is it’s me. I wrote the check. All the airline did was collect the tax and remit my money to the government. Who knows how much my excise tax will increase if the proposed budget passes. These numbers aren’t known at this time.
This is where the airlines take exception with GA pilots. The airlines are trying to hold passenger ticket prices as low as possible to maintain a competitive advantage. In their view, an increase in passenger excise taxes gives the appearance of an increase in the cost of a passenger ticket. But in reality, I have paid the excise tax even though it’s included in the cost of my ticket. The airline is only a collection agency for the excise tax. The airlines argue that they pay more than their share of the costs while receiving less than their proportionate share of the FAA services.
I think this 2008 budget is putting us on the verge of privatizing the FAA. If this happens, then who knows what the fees would be and what services will be charged. This has the potential to remove congressional oversight of the FAA. Whatever the user fees are and on what services they’ll be applied is to be determined by a “board.” With all of the lobbying that has been done by the airlines over the past year, I suspect that the airlines will be able to get several representatives on this “board.” Take the pie that’s composed of general and commercial aviation; if one side wins, then the other side must loose.
General aviation has its hands full with the budget battle with Congress. If the budget stays on course, general aviation may also have its hands full with a battle with the airlines that could last through 2017. If airlines are able to gain control of this board, then without congressional oversight, this board will be able to set fees and charges according to what they think is in everybody’s best interest.
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