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.
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
"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
"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