Fed Watch -- Reauthorization, AIP Increases

Senate to Hold Reauthorization Vote
Senate Finance and Commerce committees reached a deal which increases in general aviation contributions to the Aviation Trust Fund, clearing the way for a vote on FAA reauthorization this week. But the deal calls for the tax on GA jet fuel to rise 65 percent to 36 cents per gallon, which ups GA’s contribution to the FAA budget to five percent.
The legislation has been stalled as the Senate Finance Committee and the Committee on Commerce, Science and Technology argued over the 2007, DOT-proposed, and major-carrier backed $25 user fee, aimed at increasing the revenue from business aviation. The fee, favored by Commerce and opposed by Finance, must still pass muster in the House, which has consistently opposed the user fee, but now that it is off the table, reauthorization legislation could get to the president’s desk soon.
Business aviation interests, including the National Air Transportation Association, cautioned that user fee proposals are likely to rise again and warned members to remain vigilant in their opposition.
"We are deeply appreciative of the leadership of both the Senate Commerce and Finance committees, in particular Chairman Rockefeller, in crafting a bill that recognizes the importance of not adding new taxes on airline passengers during a time of skyrocketing fuel costs," said Air Transport Association President and CEO James C. May. “The modest increase in what corporate jets would pay is a step in the right direction, but we note that it still falls short of the costs they impose on the system. We will remain engaged with these committees as the remainder of the package is developed."
Senate passage of the measure clears the way for what little reconciliation between the House and Senate bills remains and a final vote by Congress.

Possibility of Increased Infrastructure Spending
American Association of Airport Executives President Charles Barclay reported that Congress is considering additional infrastructure spending as part of either supplemental aviation spending or as part of an economic stimulus package, calling on Congress to increased Airport Improvement Program funding. The issue is especially critical since improvements in capacity wrought by air traffic control modernization cannot be maximized without increasing capacity on the ground.
“By providing airports with additional infrastructure funding through the Airport Improvement Program, Congress could create a ‘win-win’ situation by helping to stimulate the economy through the creation of high paying jobs while expediting the construction of critical capacity, safety, and security projects at airports plagued by record passenger levels and increased airline delays,” said Barclay.
Specifically, Barclay called for Congress to provide a minimum of $285 million in additional funding for AIP for FY 2008 to bring overall program funding to the $3.8 billion authorized level contemplated as part of pending FAA reauthorization legislation. Congress previously appropriated $3.515 billion in FY 2008 funding for the program.
“With more than 300 million passengers expected to be added to today’s already crowded aviation system within the next decade, investing in critical airport infrastructure must be a high priority for the Congress,” Barclay wrote. “We appreciate the broad support the AIP program has received in the past, and we hope that you will consider approving additional resources to expedite construction of key airport projects and to create thousands of high-paying airport construction jobs.”