By The Hill Staff - 02/16/07 12:00 AM EST
A Bush administration proposal to modernize the federal air traffic control system through a new funding scheme has triggered a lobbying dogfight between commercial airlines and other powerful aviation special interests.
The root of the disagreement rests in how the administration proposes to pay to move to a system that tracks airplanes with more accurate space-based technologies, such as global positioning systems, from a control system that relies on ground-based radars. All sides agree the change is needed to accommodate the projected growth in air traffic.
To pay for the so-called NextGen traffic control system, the administration would shift from taxing commercial airline tickets and replace the lost revenue with higher user fees and other tax increases.
Given the amount of money at stake, the issue promises to be one of the most aggressively lobbied on Capitol Hill this year. In 2006, the 7.5-cent ticket tax accounted for $5.5 billion of the $10.6 billion that went into the aviation trust fund that maintains and updates the air traffic control system.
The president and chief executive of the National Business Aviation Association, Ed Bolen, said the proposal would make traveling on corporate jets more expensive.
He called the proposal a “toxic mix” of user fees and tax increases for general aviation. Fuel taxes could increase as much as 300 percent under the system, Bolen said. The current tax is 21.8 cents a gallon, but NBAA says it will rise to 70 cents a gallon.
“You can expect the entire general aviation community to be opposed to this,” Bolen told The Hill.
In the lobbying fight, the administration is allied with commercial airlines that have argued for years that general aviation wasn’t paying its fair share into the trust fund.
General aviation is responsible for 11 percent of air traffic costs but pays only 3 percent of the taxes that go into the trust fund, according to an FAA fact sheet that accompanied the release of the bill.
A “cost-based funding mechanism ... is something that we have long endorsed,” said James May, president and chief executive of the Air Transport Association of America, the airline group.
“Whether you fly a 767 or a Citation 10, you are imposing the same demand on the air traffic system,” May said.
Bolen countered that the hub-and-spoke system developed to support commercial aviation accounts for most of the traffic control system costs.
The Aircraft Owners and Pilots Association also sharply criticized the proposal.
The authorization bill that created the trust fund expires in September, so some extension will have to be adopted this year. The FAA’s proposal may be a long shot this year, however, given the stakes and the influence the stakeholders have on Capitol Hill.
AOPA spent nearly $6 million on lobbying last year, according to Senate lobbying records. Its PAC handed out more than $1 million to federal candidates.
NBAA, meanwhile, spent more than $600,000 during the first six months of 2006, and ATA spent nearly $1 million in that span. Neither group’s year-end totals had been posted by press time.
Commercial airlines also donated more than $2 million total to federal candidates last cycle, according to the Center for Responsive Politics.
The airlines will have to spend more to lobby this year in order to turn around two key skeptics: Rep. Jim Oberstar of Minnesota, the new Democratic chairman of the House Transportation and Infrastructure Committee, and Rep. Jerry Costello (D-Ill.), the chairman of the aviation subcommittee.
At a preliminary subcommittee hearing on the FAA reauthorization proposal Wednesday, the two noted FAA’s own projections that the current system would raise more money in 2008 than would be the case under the fee system the administration proposes.
May sought to focus less on the obstacles and more on the need to update the traffic control system.
“James Oberstar is not the problem,” he said. “The status quo is the problem.”
The focus should be on replacing an “air traffic control system designed in the 1950s using radar, being funded by a 1970s act of Congress that is trying to meet 20th-century demand,” May said.
The FAA projects the number of commercial flights to grow to 15 million by 2015 from 13 million in 2005. Also, an increase in the use of smaller, very light jets will likely further crowd the skies.
AOPA President Phil Boyer acknowledged the current radar-based system needs to be improved. But he said the current funding mechanism is a better way to pay for the upgrades.
“We support the need to modernize, but listen to the weasel words carefully,” Boyer said in a release, referring to the administration’s justification for the funding change.
“They never say that the current, proven tax system can not raise necessary funds to NextGen.”
An FAA fact sheet indicates the system the administration proposes would be a more stable funding stream.
“Factors like falling ticket prices can dramatically decrease revenue while costs remain unchanged,” the FAA said.