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.|
Congress is saying that they need additional sources of revenue of the Next Generation Air Transportation System. This new system is needed to handle the growing demand for airspace. But as you read the transcripts, there are conflicting opinions on what those financial needs are. Some agencies are saying that the existing funding methods will be adequate, while others argue that there’s a shortfall of resources.
There are a lot of members in Congress who support the proposed budget. There’s also a lot of support in Congress for general aviation. Supporters of the proposed budget are holding to the premise of “pay for the service consumed.” If you use a service, then you should pay for it. The FAA shouldn’t be subsidized by the general-public taxpayer. If the general public takes a flight, then they should pay for their proportionate share of the expense in the fees and excise taxes. But again, who will determine these costs and how will they be allocated? That is a major concern for which I haven’t seen an answer.
Other members in Congress argue that all of America benefits from aviation, and if the costs exceed the revenue, then the general public should pay the difference. These members look at the economic benefit that the aviation industry generates. All companies have to operate at a profit to stay in business. Opponents of the proposed budget fear that the airlines will seek to divert their proportionate share of the expenses over to general aviation. We all know about airlines that have come and gone while trying to compete and remain profitable.
If you have an opinion regarding the 2008 proposed budget, I encourage you to contact your congressman/congresswoman or your senator. There will be a lot of debate over the budget during the next couple of months, but September 30, 2007, is the drop date. Otherwise, I’m afraid that none of us will be in the air without the services of the FAA.
O. H. “Harry” Daniels, Jr., is a CPA, PFS and a CFP licensee. He’s a partner with Duggan, Joiner & Company, Certified Public Accountants. Harry has held his private-pilot license since 1991. E-mail him at
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