Says Congress Would Still Have Power Over What FAA Could Do With Fee Revenue

In a telephone conversation with Aero-News last week, representatives with the Federal Aviation Administration rebuked many of the points presented by the Alliance for Aviation Across America, in that group's rebuttal to the FAA's policy document released April 23 on the subject of user fees. Over the next several days, ANN will present those arguments, and the FAA's contrasting position on each issue.

• Read Part One Here

• Read Part Two Here

As Aero-News reported, the Alliance states the FAA's funding plan will strip Congress of its ultimate power to control appropriations for the agency. FAA Economist David Weingart confirms Congress would not be responsible for setting specific fees... but he adds Congress would still have significant power over how much of that money the FAA could use.

"It is true that Congress would not be involved in setting the user fee rates, per se," Weingart told ANN. "Under the legislation, those would be set by the FAA in conjunction with the stakeholder board. However, the proposal is also very clear that the entire FAA budget, including the user fee revenue, would be subject to congressional appropriation -- which effectively gives Congress the power to set the total amount of revenue we could collect through user fees.

"It is true they wouldn't be able to say what the rate-per-mile would be, or the rate for landing at a particular airport," Weingart continued, "but they could say the FAA can only collect $10 billion, or $9 billion, etc. through user fees."

As for the Alliance's contention that airlines would not in fact pass on tax savings to their passengers -- but would rather reap the full benefits from tax breaks (the group cites a 2004 warning to Congress from the Government Accountability Office to that effect), Weingart said that's up to the marketplace, essentially.

"There's a lot of debate among economists on who bears the burden of a tax, and what businesses might do compared to consumers in this type of situation," Weingart admitted. "Ultimately, this will be determined by the competitive market."

Weingart also points out the GAO study the Alliance cites "has several caveats in it" -- including the fact many of the GAO's numbers were from 1996, before low-cost carriers had gained a significant foothold in the market.

"Today, as you know, the low-cost carriers have a much more significant presence and have much more significant influence over the entire industry than they did a decade ago," he said, implying that competitiveness would keep fares down.

Coming Friday... Do User Fees Really Damage Aviation?

FMI: www.faa.gov, www.aviationacrossamerica.org/