WASHINGTON, DC - The Committee on Ways and Means today reviewed the financial status of the Airport and Airway Trust Fund. Aviation-related excise taxes are deposited into that Fund and used to help finance our aviation system. The majority of these taxes are set to expire on Sept. 30, 2009, unless Congress acts to extend them. Expiration of the taxes could jeopardize projects at airports across the nation.
“The Federal Aviation Administration (FAA), the Trust Fund, and the aviation excise taxes have been operating under temporary extensions for more than a year and a half," said Ways and Means Committee Chairman Charles B. Rangel (D-NY). “We intend to act on this matter so that we can avoid the need for yet another temporary measure."
Chairman Rangel’s concerns were echoed by the distinguished panel of witnesses including:
* The Honorable James L. Oberstar, Minnesota, Chairman, Committee on Transportation and Infrastructure
* The Honorable John L. Mica, Florida, Ranking Member, Committee on Transportation and Infrastructure
* The Honorable Jerry F. Costello, Illinois, Chairman, Subcommittee on Aviation, Committee on Transportation and Infrastructure
* The Honorable Thomas E. Petri, Wisconsin, Ranking Member, Subcommittee on Aviation, Committee on Transportation and Infrastructure
* Robert A. Sunshine, Deputy Director, Congressional Budget Office
Earlier this year, the Transportation and Infrastructure Committee approved a new FAA reauthorization bill, H.R. 915, for fiscal years 2009-2012. Today’s hearing examined the current condition of the Trust Fund to help the Ways and Means Committee consider the financing provisions that expire later this year.
In his testimony, Committee on Transportation and Infrastructure Chairman Oberstar explained:
“I cannot stress enough the importance of moving this legislation quickly, as we are already almost two years behind schedule in reauthorizing these programs. Airport development capital projects and key NextGen programs need the stability that a multi-year authorization bill provides."
“Changes to the current system of excise taxes should be made only if such changes will improve upon this record of stability, revenue adequacy, and ease of administration."
Subcommittee on Aviation, Committee on Transportation and Infrastructure Chairman Jerry F. Costello highlighted the broad support for reauthorization:
“Although there are a number of contentious issues that have marked this reauthorization process, virtually the entire aviation community - airlines, airports, general aviation, state aviation officials - have communicated to us in a unified voice the need to get a multi-year reauthorization bill done as soon as possible."
Both Chairmen Oberstar and Costello recommended that the Ways and Means Committee increase the general aviation fuel tax rate from 21.8 cents per gallon to 35.9 cents per gallon, and increase the aviation gasoline tax rate from 19.3 cents per gallon to 21.4 cents per gallon. This increase is identical to legislation reported by Ways and Means in 2007 and was passed by the House on Sept. 20, 2007.
Robert A. Sunshine, Deputy Director, Congressional Budget Office stressed the importance of the legislation to the aviation system:
“The issues now being considered by the Congress will have important consequences for how efficiently the national airspace is used in the future. The current financing system provides limited incentives to air carriers and general aviation flyers to use the system efficiently in congested areas-but structured differently, by linking the taxes paid by users of the system to the cost of providing air traffic control services, the financing system could help to reduce the potential for increasing congestion and delays."
