House Passes FAA Funding Bill

Following Senate action, the House of Representatives passed yet another continuing resolution last Tuesday, affording FAA funding through June 30 which includes $2.76 billion in contract authority for the Airport Improvement Program which has been suspended since December 31. The legislation, H.R. 5270, the...

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Following Senate action, the House of Representatives passed yet another continuing resolution last Tuesday, affording FAA funding through June 30 which includes $2.76 billion in contract authority for the Airport Improvement Program which has been suspended since December 31. The legislation, H.R. 5270, the Airport and Airway Extension Act of 2008, was approved by the Senate last week by unanimous consent. The measure then cleared the House of Representatives meaning that it is now on its way to the president’s desk for enactment into law.
The measure extends agency funding beyond the February 29 expiration date of the last continuing resolution. The measure would re-capture the spring construction season that was feared lost by airport industry representatives who have been urging Congress to reinstate the program. Related Story It also includes a provision supported by the American Association of Airport Executives, maintaining a higher federal matching share of 95 percent for AIP projects at small airports.
Meanwhile, industry and legislators from both parties criticized the Bush Administration’s FAA budget. Most criticism echoed that of House Transportation and Infrastructure Aviation Subcommittee Chair Jerry Costello (R-Ill.) who can’t fathom why the Administration proposed a 1.8 percent cut in FAA funding at a time when more money is needed for NextGen and delays last year reached record levels.
While airports and major carriers are committed to the Administration’s changed funding mechanism which would impose user fees, it remains the over-riding sticking point in passing a multi-year FAA reauthorization bill since last year’s House reauthorization bill rejected the new mechanism and the Senate bill did not. Such fees would put regionals over $100 billion in the red.
Meanwhile, failure to pass reauthorization has become critical despite repeated continuing resolutions. While the Administration cuts aviation spending, the entire industry is fighting for increased funding for the implementation of NextGen, the only sure-fire bet for increasing capacity and reducing congestion.
However, according to the Department of Transportation Inspector General Calvin L. Scovel III, who testified recently on the budget, increased funding will be more than needed as projected costs for NextGen could balloon beyond $50 billion, up from the $15-$22 billion now projected. Testifying before the House Transportation Committee on the FAA’s FY 2009 budget, Scovel said the FAA's proposed budget for 2009 "remains uncertain,” the Associated Press reported. He also said “FAA needs to establish reasonable expectations for NextGen investments and realistic timeframes for improvements to enhance capacity and reduce delays." These are just the items called for by industry for years. In addition, Congress has already expressed concern in the $8 billion swing in FAA’s low and high estimates.
House Transportation and Infrastructure Committee Chair James Oberstar and Costello wrote a USA Today Op-Ed criticizing the publication for climbing on board the user-fee band wagon. “The administration cites the need to pay for the Next Generation Air Transportation System (NextGen) as its rationale for aggressively promoting a radical new tax and financing structure for the Federal Aviation Administration (FAA),” said the two legislators. “But our run of the numbers indicates otherwise. From fiscal 2010 to fiscal 2013, the administration's aviation user fee proposal would actually bring in $2.1 billion less than the amount of receipts that would be collected under the existing aviation excise tax structure.
“Furthermore, the administration's budget requests do not match its rhetoric,” they continued. “In 2003, the FAA requested approximately $3 billion per year for its capital program. Yet for fiscal years 2005 through 2008, the administration requested roughly $2.5 billion per year for its capital program. For next year, it slightly increased the request to $2.72 billion, a step in the right direction, but not enough to transform the air traffic control system.”
Oberstar and Costello called the new funding mechanism an “ideology-driven solution in search of a problem” adding that the problem was not a lack of money but a lack of FAA leadership. “To divert attention from this reality, the administration is trying to blame general aviation, the House or air traffic controllers for the lack of progress,” they concluded. “That's grossly inaccurate and does nothing to help us move this issue forward.”