Inadequate revenue from aviation taxes on fuel and tickets, which fund the U.S. aviation infrastructure and the agency that regulates it, is how some in the FAA justify their desire for user fees to make up the difference. Before they go there, why doesn’t government catch up with current airline business practices and include the myriad fees that are not subject to the ticket tax.
We’re taking some serious money here, an average of $250 million a year from baggage fees alone, according to a Washington Post article, “As airlines raise fees instead of fares, taxpayers pick up the tab.” As the article’s graphic above shows, between 2007 and 2012 the airlines collected $12.8 billion in baggage fees. At the 7.5 percent ticket tax rate, that’s $960 million in lost revenue. During the same period, the airlines charged another $11 billion to change a ticket.
Simply put, airline fees not subject to the ticket tax is one reason why aviation revenue has not kept pace with its costs. Let’s face it, we’d all like tax-free income, but it is not fair to anyone who pays the fees and uses the system. The DoT took the first step in its fiduciary responsibilities when it required airlines to include all applicable fees when passengers bought a ticket. Making the total subject to the ticket tax seem the logical next step.
Some might argue this is not fair to the airlines or its passengers. Almost certainly, the airlines would increase fees to cover the tax bite, which wouldn’t make passengers happy. But they are taxpayers, too, so one way or another, they’ll be paying for the system that gets them safely from Point A to B. As the heaviest user of the air traffic control system, comprehensive application of the ticket tax seems to be the easiest and most equitable funding mechanism.
Beyond the unfairness of user fees, creating and implementing a system to collect them would only increase the aviation’s costs more, given the FAA’s bureaucratic and system inefficiencies, which AIN recently itemized in “FAA Budget: Agency Struggles To Manage Resources.” Congress, the report notes, contributes to the problem, and given its performance over the past two years, resolving that problem is certainly impossible.
But that doesn’t mean we should not try, because putting pressure on our elected officials to put pressure on the agencies that run the system is the only way we’ll see change for the better. If we surrender the eternal fight, airline passengers won’t be the only ones paying a growing list of ever climbing fees. — Scott Spangler, Editor
Scott,
Personally I hate this idea. It’s just user fees in sheep’s clothing. The EAA is dealing with this now, as you know, with paying for the ATC services for Oshkosh. I would rather they increase the fuel taxes incrementally and not set up a new bureaucracy to manage al la cart services, like our friends at the airlines. The bag fee has made plenty of money at the aggravation of passengers. People get around it by carrying on the kitchen sink which has caused boarding and unboarding issues that affect us all. Maybe I’m missing your point.
My 2 cents.
Brent
You sound just like another politician trying to soak more money out of a concept you didn’t develop, have no idea how it operates, and have no accurate gauge on which to measure the damage it inflicts.
You think it won’t be passed on to the consumer??
More tax is not what this country needs!
This is a creative idea to relieve the burden on GA, but I also travel commercially. It might interest you to know that the ‘law’ about all fees being included in the published total cost isn’t exactly true. I had to make an emergency run from MCI-HLN in January because of a sick granddaughter. A friend that I was vacationing with loaned me his credit card, which covered the cost of the ticket, but the Res Agent wouldn’t allow me to use it for the separate $25 bag fee. I have actually talked to people at air shows who ground ship ahead, because it is cheaper.
After reading your post, I flipped through some of the recommended ones, dating back to Rob Mark in 2007. What I was seeking was an actual published figure from the Feds that represents the total revenue they think will be gained from imposing user fees.
In other words, I would like to see the business plan on this deal.
“This is a creative idea to relieve the burden on GA, but I also travel commercially.”
Kimberly…what?!? So you support taxing some other aviation business revenue stream in order to keep the tax man out of your (GA’s) pockets??
How, how, fair. Don’t you see that a tax is a tax is a tax and all citizens should be protesting the rampant waste within the FAA before we just throw more good money after bad.
Let’s start with eliminating some of the 83 FSDO located around the country. Half would suffice. Force retire ALL employees over 65 years of age. Just like airline pilots. After all, we can find lot’s of 25 year olds to do the job at 1/3 the cost of the older employees. Time to start running the entities of government just like the private sector.
What we don’t need is the blatant agreement that more revenue will fix problems that have existed since the early sixties.
Yes, Afello, I agree with your thought that our government should be run just EXACTLY like a well-run, profitable private sector business. One that has a family-oriented company culture and unmandated affordable healthcare for everyone and their family.
My ex went to work for a trucking company based in WI that was all of this and more. The parent company was Jupiter Transportation and we couldn’t believe that a company actually EXISTED that signed him up right away for participation in the Master Profit Sharing benefit.
If I recall correctly, we went through about 7 healthcare insurance companies, because the business can be dangerous if you insist on being an idiot. You see, the division he retired from was called Equipment Transfer, LLC. It also had several name changes, as well as agent of record changes, and FEIN changes, according to his Social Security Earning Detail Statement.
When he started there (in 1988) we had annual meetings in Kenosha which included barbeque and your choice of a golf outing or deep lake fishing.
Somewhere along the line, some of the employees decided they wanted more pie for themselves. And some of the management team decided they needed extra pie, too.
Here is the downfall of pie: you can cut the pieces SMALLER, but you can’t make one pie magically become 5.
As an aside, during Union negotiations in 2001 (I had submitted the drivers’ proposal, after writing up EVERY bitch that the drivers were calling MY house with on the weekends), I had to sit outside the room because I was neither a Union employee nor a management person.
I got to play both sides. The Union paid for my breakfast
and the VP for Employee Relations sent me a big bouquet of flowers afterwards.
BECAUSE I KNEW MORE ABOUT THE COMPANY THAN ANYONE ELSE SITTING AT THE TABLE.
Please, have a great and blessed day. You have provided me with great entertainment this morning.
I believe that I have a simple solution to the vexing problem of user fees, higher and higher fuel taxes and sequestration. One in which you do not have to be Newt Gingrich to understand. This proposal should also appeal to my dear and trusted friends at the FAA who I admire deeply. However this proposal would mean sharing some of their power, which I know will be painful, but under the circumstances necessary and may allow them to share the burden of their safety worry as well.
The FAA has complained that they cannot reconcile their records and determine definitively what aircraft are still in the inventory. Helicopters and aircraft with standard airworthiness certificates require an annual inspection each year. Experimental helicopters and airplanes require a condition inspection every year. I propose that owners pay a fee each time they get an annual or condition inspection on their aircraft. Transfer the responsibility of collecting the fee for annuals to the state level. License aircraft mechanics by the state to collect the fee from the airplane owner upon signing the annual inspection weather airworthy or un-airworthy as is done now. The person doing the inspection is now obligated as an A&P to process fees for the state for each aircraft that they inspect.
In the case of an individual who built his experimental aircraft himself and went through the process of becoming licensed to perform the condition inspection on his aircraft as a repairman, would simply be billed annually by the state to recover the fee. Each aircraft would need to display in plain view of the local authority ie DPS, or Sheriffis Department of each state an inspection sticker for compliance the same as we now do in most states for our automobiles. This information would be transferred to the FAA by the state agency so that the FAA could better control their safety worry. I do not propose to change the federal requirement of the Airworthiness Inspector by the FAA to disclose each inspection he has performed the previous biannual period for his certificate renewal.
I also propose aircraft owners billed by the state for registration fees according to the location listed on the registration certificate that is required by federal law to be carried in the aircraft, (ARROW) every year as we now do for our automobiles. This means in essence anything that flies regardless if it uses an airport or not. This same scheme would also be applied to single pilot and multiple pilots certified FAR part 135 commercial entities. Because, part 135 regulations have very specific rules regarding who and when aircraft are inspected in the concern, the burden is shifted to the state level of authority to collect these fees according to where that particular aircraft is based. For Example, If the business headquarters are in Dallas Texas, but the aircraft operates for a contract in say Florida, the State of Texas and specifically Dallas is responsible for collecting the fee. I will not touch on 121 carriers; we are as passenger’s taxed to death for that convenience already. The fees collected should go towards airport improvements and maintenance, help pay for Next Gen, controller salaries, GPS satellite maintenance and upgrades, communication improvements and maintenance, etc., etc., etc.
I believe that a flat tax or surcharge on fuel for example is insufficient and excessively burdensome on small aircraft owners and operators. Attempts by airport fixed base operators to bill aircraft of less than say 12500 lbs ineffectual and unenforceable is also insufficient and just flat turn’s pilots away from their businesses. And it will just get worse to the point that no one will want to purchase a new or used airplane and enjoy the freedom and convenience of flying.
There are those of us who believe that this is totally unfair for one reason or another. For you I ask to consider this: for those of us that do not have a transponder in our aircraft and do not ask for assistance from ATC, or land on public and private airports do however fly in class G airspace that is uncontrolled by definition in a sovereign nation that is protected by the DOD; that freedom is and always has been very, very expensive my friends. To my future employers and friends in this small community please do not hold my opinion against me as I will be looking for a job soon. I believe that it is time for some quantifiable solutions to get us back on track again as a major economic mover and at least try and hold up my end. I encourage your comments and always respect your opinion regarding this issue that needs to be addressed.
I read about what the FAA wants to charge the EAA for Tower Controller Services. When I read that, the first thing that came to my mind was this: why didn’t the EAA recruit some retired controllers to volunteer to manage terminal air traffic for the event? The EAA maintains a volunteer pool to run their airshows and asks for volunteers before their events. That is if they could have found a few that were not still disgruntled about getting fired that is. They are licensed air traffic controllers. Why should the FAA care if they get paid or not? I think that the EAA did its membership a disservice rolling over and forced into using FAA employees to run the towers for this event. I would venture to say that FAA’s financial troubles are not entirely their fault and the focus should be put on the Office of Personal Management (OPM). Their policies and procedures may have a lot to do with the entire problem of managing federal debit for the entire country and should be the focus of attention with regard to failing agencies of the United Sates Government and not individual agencies ex. FAA, Post Office….. I agree that we should use private enterprise when possible for services provided the private sector can do it more effectively and cheaper than the Federal Government can. I also believe that when a government agency is no longer needed it should simply “go away” and not propped up by more taxation because it is in the red. Private enterprise will not do anything unless there is some profit built into it and they will have to be paid by the users of the system. But that arm cannot be OPM any longer and should be transferred to each state which has skin in the game and effectively manages better.
One word: liability.