Does This Mean We're Due A Refund?

The next time some wag tells you that BizAv is not paying it's fair share of the costs of running the nation's aviation infrastructure, tell them they are ill-informed. The business aviation community pays more than 100 percent of its share of the costs it imposes on the Federal air traffic system, according to a new study by the consulting firm of HLB Decision Economics, Inc. The study found that business users “pay more in Federal aviation user fees than the total costs borne by the Federal government to provide them with aviation services.”

The study, funded by the National Business Aviation Association (NBAA), showed that the business aviation community paid $188 million in Federal excise taxes as its share of Federal aviation costs in fiscal year 2001. That amount is 102 percent, or $4 million, more than the cost identified by the Federal Aviation Administration (FAA) in FY 2001, the last year for which data is available.

“This study refutes recent suggestions that the general and business aviation community does not pay its fair share of the costs of operating the nation’s air traffic control system,” said NBAA President and CEO Ed Bolen. “Not only does business aviation pay what it owes, it actually pays more.”

The study concludes that the overcharging results in business aviation users reducing their use of the system and “diminishes the contribution of business aviation to national economic growth.” Estimates are that business aviation contributes $102 billion each year to the U.S. economy, and accounts for 1.3 million jobs.

Although the FAA has claimed that general aviation underpays, the study found that the agency’s calculation methods and methods of assigning cost responsibility have varied widely for years. In fact, the study found the FAA based its most recent estimates on a methodology rejected by Congress for other Federal transportation agencies.

In addition, the study found that the FAA assigns to general aviation alone “a sizeable amount” of “common costs” that are incurred on behalf of all users, including commercial airlines and the military.

Noting that the debate about cost responsibility has dragged on for decades, the study urged action by Congress to bring more fairness to aviation funding. “Finding a long-term, stable policy solution must begin with Congressional direction to FAA regarding cost-allocation principles,” the study concluded.

“We look forward to working with Congressional leaders to act on the study’s recommendations to develop a fair and reasonable system that works for all users,” Bolen said.

FMI: www.nbaa.org, http://web.nbaa.org/public/news/stats/hlb_report_costalloc.pdf