FAA fund declines; fees could result

February 8, 2011 at 1:51 pm | Posted in Aviation Law Current Event | Leave a comment

by Sara M. Langston with the blog faculty

Source: The Washington Post

The Federal Aviation Administration’s primary source of funds is drawing down unsustainably, according to a Government Accountability Office report released today. Increased fees on flyers are among the possible results.

Over the last decade, FAA expenditures increased 60 percent, but contributions from its primary funding source, the Airport and Airways Trust Fund, rose only 12 percent.

“The Trust Fund’s uncommitted balance, which exceeded $7.3 billion at the end of fiscal year 2001, dropped to $299 million at the end of fiscal year 2009–the lowest balance over the past decade,” the report said. The balance declined every single year during that timeframe.

The trust fund receives money primarily from excise taxes and fees paid by airline customers and by purchases of aviation fuel from passenger and cargo airlines. It pays for facilities and equipment, including the air traffic control system; research and development on safety and mobility; and the airport improvement fund.

The report warns that trust fund revenues in the future will be lower than they have been, and that Congress must be careful not to over-commit funds. Over the next six years, the feds are projecting about $25 billion less for the fund than they thought they’d see four years ago. And 9 out of 11 of the past years, beginning-of-the-year estimations over-projected income, causing too much money to be budgeted. In total, revenue over that period was overestimated by $9 billion.