The White House is projecting that the balance of the user-funded Airport and Airway Trust Fund will grow steadily over the next decade even as the Obama administration pushes to have it pay for nearly all of ’s activities.
The White House’s budget documents lay out a road map to wean FAA from general-fund contributions. The administration’s fiscal 2015 budget request would have the trust fund cover 93% of FAA’s operations, in addition to covering the Airport Improvement Program, its facilities and equipment and research, engineering and development accounts. That level would be requested for the rest of the decade.
At the same time though, the trust fund—topped up with ticket, fuel, cargo and other user taxes—would continue to grow under the White House budget. Trust fund balances have fluctuated over the years, but are near where they were about a decade ago, with an unexpended balance of $11.62 billion at the beginning of fiscal 2013. That jumped to $13.2 billion by the start of 2014, $5 billion of which is uncommitted. The increase no doubt was at least partly a result of sequestration and the 16-day government shutdown.
Under the White House budget, the unexpended balance would reach $16.4 billion within five years.
White House estimates for the trust fund to continue to grow as it looks to raise new sources of revenue through a $100 per-flight air traffic control user fee. User fee proposals are not new—every administration over the past couple of decades has pushed for them, but have have gained little traction in Congress and are not expected to make any headway this year.
“We always pay attention to the president’s budget, but we know Congress holds the purse strings,” notes National Business Aviation Association President and CEO Ed Bolen. He calls the user fee proposal “bad policy,” saying it frustrates operators that the White House position appears to lack recognition of the economic benefits of a healthy aviation industry.
But the good news, he adds, is that Congress has traditionally provided stable funding for the agency and consistently rejected user fees.
“It appears from the president’s budget that the aviation trust fund is projected to have a healthy balance for the foreseeable future,” says Jim Coon, senior vice president of government affairs and advocacy for the Aircraft Owners and Pilots Association. “And, with or without the proposed $100 user fee, the FAA clearly does not have a revenue problem based on the administration’s forecast. Moreover, the FAA budget has increased more than 500% from $3.2 billion in 1980 to $15.6 billion today.”
The trust fund balances and general fund contribution in the past have been sources of considerable debate in Washington. Aviation users have pushed for a greater general fund contribution, saying the public in general benefits from a robust aviation system. Others have feared the use of trust fund balances to mask federal deficits.
With Congress, the general fund contribution also has been a staple in FAA’s budget, Bolen says. “Congress recognizes that the airspace is a public good.”
But whether that contribution continues is less clear. The Congressional Budget Office estimates that the trust fund is covering 80% of FAA’s total fiscal 2014 spending, and projects an increase in the trust fund share of FAA’s budget to 100% by 2022. But unlike the White House, the CBO sees a relatively stable trust fund, at about $13.5 billion over the next decade. The CBO estimates do not assume user fees as the White House estimates do. The uncommitted balance, however, would grow to $6.9 billion.
While the political climate and budget debates no doubt will change over the next decade, what is most concerning, says Paul Feldman, vice president of government affairs for the General Aviation Manufacturers Association, is that the fiscal 2015 White House proposal would take more money out of the trust fund and raise fees on users, yet keep the budget flat. “That picture is something of [a] concern to us,” Feldman says, noting it appears that the White House budget would not reinvest the increased revenues back into the aviation system.