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FAA fund declines; fees could result
February 11, 2011
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  • By Luke Rosiak

    February 7, 2011

    The Federal Aviation Administration’s primary source of funds is drawing down unsustainably, according to a Government Accountability Office report released today. Increased fees on flyers are among the possible results.

    Over the last decade, FAA expenditures increased 60 percent, but contributions from its primary funding source, the Airport and Airways Trust Fund, rose only 12 percent.

    “The Trust Fund’s uncommitted balance, which exceeded $7.3 billion at the end of fiscal year 2001, dropped to $299 million at the end of fiscal year 2009–the lowest balance over the past decade,” the report said. The balance declined every single year during that timeframe.

    A reduction in air travel due to the 2001 terrorist attacks and the recent poor economy are among the reasons for decreased revenue. “During the recent recession, Trust Fund revenues declined from $12.4 billion in fiscal year 2008 to $10.9 billion in fiscal year 2009, in part because of the 7 percent decline in domestic passenger traffic during that period,” the report said.

    The trust fund receives money primarily from excise taxes and fees paid by airline customers and by purchases of aviation fuel from passenger and cargo airlines. It pays for facilities and equipment, including the air traffic control system; research and development on safety and mobility; and the airport improvement fund.

    The availability of funding for airport facilities is important in part because of the FAA’s new NextGen technology, which uses satellites instead of radar to track planes more precisely, the report notes. That will enable controllers to guide more planes through congested routes, as the Post’s Ashley Halsey III wrote last week–but only if the runways can accommodate those planes, too.

    The report warns that trust fund revenues in the future will be lower than they have been, and that Congress must be careful not to over-commit funds. Over the next six years, the feds are projecting about $25 billion less for the fund than they thought they’d see four years ago. And 9 out of 11 of the past years, beginning-of-the-year estimations over-projected income, causing too much money to be budgeted. In total, revenue over that period was overestimated by $9 billion.

    One option would be to increase revenue by ramping up taxes or increasing surcharges on flyers.

    “For example, we suggested that if Congress determines that the benefit of added revenue to the Trust Fund warrants taxation of optional airline service fees, such as baggage fees, then it should consider amending the Internal Revenue Code to make mandatory the taxation of certain or all airline-imposed fees and require that the revenue be deposited in the Trust Fund,” the GAO said.

    Date: 2011-02-07