Weekly of Business Aviation
FAA BUDGET PROPOSAL WOULD CUT AIP, F&E, ACCELERATE TRUST FUND DEPLETION
by Dave Collogan
The Bush Administration's proposed budget for FAA in fiscal 2006 would sharply increase the amount of money from the Airport and Airway Trust Fund used to cover FAA's costs and would reduce spending significantly for the Airport Improvement Program. The proposal also would trim Facilities and Equipment spending below authorized levels.
Overall, FAA spending would decrease about one percent from the current year's level, according to Transportation Department and FAA officials, a relatively small decrease compared with other government programs, some 150 of which the Administration wants to eliminate completely.
According to the proposal sent to Congress last week, spending for FAA operations would increase by $300 million, from $7.7 billion this fiscal year to $8.05 billion in fiscal 2006. However, the amount of money coming from the general fund (non-Trust Fund money) for FAA operations would be reduced from $2.8 billion to just $1.55 billion, only about 12 percent of FAA's total budget. FAA Administrator Marion Blakey and other Administration officials have been warning that lower fares being paid by airline passengers will result in a reduced flow of revenues going into the aviation trust fund.
By decreasing the amount of general fund revenues for FAA and accelerating withdrawals from the trust fund, the Administration could be setting the stage for an FAA financial crisis down the road. FAA also is seeking $150 million to cover the costs of transitioning operation of the nation's Flight Service Station (FSS) network from government employees to a private industry team headed by Lockheed Martin.
Grants-in-aid to airports under the AIP program would fall 16.5 percent from nearly $3.5 billion this year to $3 billion next year. Blakey said an annual survey showed a 15 percent reduction in airport development needs when it was published in September, even though the total from the survey is always far higher than the AIP budget. She also said airports could enact new or higher passenger facility charges (PFCs) on passengers to partially offset the lower AIP funding.
Airports' Criticism
Airport interests attacked the proposed AIP cuts, charging that if adopted, they would "have a significant impact on critical capacity, safety and security-related projects at airports across the country...these programs are critical for airports to handle current traffic levels as well as build our airport system to handle future demand," said the Airport Legislative Alliance, which represents the nation's two largest airport lobbying groups, the American Association of Airport Executives and Airports Council International-North America.
Funding for Facilities and Equipment (F&E) programs, which include capital spending for air traffic control modernization programs, would be $2.45 billion, only marginally changed from $2.54 billion this year. However, the fiscal 2006 proposal is more than $600 million below the $3.053 billion authorized for F&E in the Vision 100 legislation enacted earlier.
Reaction from other segments of the industry was mixed. Jim Coyne, president of the National Air Transportation Association, criticized the Bush Administration for sending up a budget proposal that contained less money for AIP and F&E than specified in the Vision 100 FAA authorization legislation. "I am concerned that the Administration is neglecting to look at the big picture when it comes to analyzing our national aviation system," Coyne said. "Significantly cutting aviation funding at a time when Americans are returning to the skies in record numbers can have a far-reaching negative impact on the industry," he said.
No New User Fees
Phil Boyer, president of the Aircraft Owners and Pilots Association, said for aviation, the budget "could have been a lot worse. The best news is that there will be no user fees for general aviation in 2006. In fact, the budget book even reiterates the 'no user fee' language included in the last FAA spending bill." However, AOPA did note that the cut in AIP funding will hit general aviation airports harder because of the formula used to distribute the airport money.
"The small GA airports that can afford it the least would be hurt the most under this budget proposal," said Andy Cebula, AOPA's senior vice president of government and technical affairs. "We will have our work cut out for us to protect general aviation airports' share," he said.
The National Air Traffic Controllers Association blasted the budget proposal for appearing to go back on FAA's word to increase the number of air traffic controllers over a specified period. NATCA cited FAA's December announcement that it planned to hire 1,249 controllers in fiscal 2006 and charged that the budget proposal released last week calls for hiring only 595 new controllers in fiscal 2006. "Woefully inadequate doesn't even begin to describe this latest bait and switch from an agency that seems unwilling to acknowledge that Congress and the flying public are demanding more attention to the safety of our National Airspace System," said John Carr, NATCA president. "This is a race to the bottom for safety and efficiency and it's unacceptable."
Carr said FAA needs to work with the White House and Congress to make ATC staffing a priority. "We thought the agency was off to a good start in December with its staffing report," but he said the budget proposal "shows that commitment to be one step forward and two steps back."
The General Aviation Manufacturers Association expressed dissatisfaction with portions of both FAA's and NASA's budget proposal, charging that the funding levels proposed "will not provide sufficient resources for these agencies to fulfill essential parts of their mission."
Insufficient support for NASA's high-risk, pre-competitive aeronautics research "could compromise long-term development of break-through technologies to improve aviation safety and efficiency," said Ron Swanda, GAMA's interim president. He added that reducing NASA's aeronautics funding by $100 million in fiscal 2006 "completely ignores recommendations from the President's Commission on the Future of the United States Aerospace industry."
Swanda also was critical of FAA funding cuts, particularly "under-funding of certification services...reducing these services could slow introduction of new and improved general aviation products," he said. Budget documents indicate FAA plans to allow the number of FAA inspectors to decline by 250 through attrition, replacing only 97 of those positions, for a net loss of 150, GAMA said. "Some manufacturers have already been notified that certification services will be curtailed this year because of FAA staff reductions," Swanda said. "Just as our industry has turned a corner and is growing at near record levels, the FAA's lack of certification resources could become the biggest obstacle to increasing U.S. jobs and the strength of the U.S. aviation industry."
New Jersey Aviation Association
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Phone: 973 734 9994 - Fax: 973 734 9995
