NextGen funding battle heats up

Controversy centers on whether Congress should impose air traffic system user fees

Bush administration wants to change FAA funding model

In a Sept. 19 Statement of Administration Policy, White House officials blasted the House’s Federal Aviation Administration funding bill. However, despite the strong words, the House passed the bill 267-151 the next day.

The statement said “if H.R. 2881 were presented to the president, his senior advisers would recommend that he veto the bill.” It stated that:


  • The bill does not include market-based measures to reduce air traffic congestion.
  • Users are not encouraged to be efficient under the bill’s “inequitable tax system.”
  • Users pay taxes that do not correspond to the costs they impose.

— Ben Bain

Coming off a turbulent summer travel season of record flight delays, cancellations and air traffic congestion, nearly everyone seems to agree that the Federal Aviation Administration’s Next Generation Air Transportation System would help fix those problems. But despite its popularity, the FAA’s planned civil aviation overhaul has become mired in a politically charged funding battle.

Controversy about how to fund the NextGen project, which could cost as much as $20 billion by its completion in 2025, sets the House against the White House and FAA. Unions and organizations that represent commercial airlines, general aviation pilots and owners also disagree about who should pay for the project. NextGen will replace the existing radar-based air traffic control system with one based on Global Positioning System satellites.

The disagreement is about whether the government should replace the current tax-based method of funding FAA with a funding model based on taxes and user fees. FAA, most large commercial airline companies and White House officials favor adding user fees.

“For years, corporate aviation has been getting — and I use the term broadly — a free ride because they’ve been subsidized by commercial aviation,” said David Castelveter, vice president of communications at the Air Transport Association of America.

Meanwhile, general aviation proponents say that they already pay a fair share of aviation costs.

“A strictly user-fee-funded system is going to price us out of the skies, and it will put the airlines in control of the system,” said Andy Cebula, spokesman at the Aircraft Owners and Pilots Association, which represents more than 400,000 pilots and aircraft owners. Its members are concerned that adding user fees now would eventually lead to a system funded entirely by user fees.

The general aviation community is confident that the current tax-based system can fund NextGen, said Ed Bolen, president and chief executive officer of the National Business Aviation Association, which represents more than 8,000 businesses that operate noncommercial airlines.

A majority of House lawmakers seem to agree with Bolen’s assessment. They passed an FAA funding measure Sept. 20 that included no user fees. House members said they could raise the necessary funds by increasing the tax on general-aviation jet fuel.

“We are providing more money than the administration asks,” said Jim Berard, spokesman for the House Transportation and Infrastructure Committee. “The administration’s problem is they are not satisfied that we didn’t accept their changes in the way revenue is collected for those programs.”

FAA spokeswoman Diane Spitaliere said user fees are necessary to pay for NextGen and ensure “that everyone is paying their fair share.” The agency is hopeful that a final Senate bill will require user fees, she said.

Despite FAA’s objections to the House measure, the agency remains committed to NextGen.

In August, FAA chose ITT to develop and deploy the Automatic Dependent Surveillance-Broadcast, a key component of NextGen. The $207 million initial contract is safe, Spitaliere said.
The Senate most likely will vote on its funding proposal later this month, observers say.

The White House has threatened to veto the House bill in its current form.

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