Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, March 20, 1990 TAG: 9003202618
SECTION: NATIONAL/INTERNATIONAL PAGE: A1 EDITION: METRO
SOURCE: The New York Times
DATELINE: WASHINGTON LENGTH: Medium
Despite the urgency of expanding the nation's air capacity, the administration's plan to the problem faces a skeptical reception in Congress.
The plan calls for higher fuel and ticket taxes, along with new airport departure fees. Many lawmakers in both parties say they oppose making passengers pay the lion's share of government support for aviation.
The administration would sharply increase federal spending on airports and the air traffic control system. Administration officials say that the increase at a time of tightening budgets is a sign of how seriously they view the problems facing the aviation system in the coming several years.
Spending on computers, radar sets and radio links for the air traffic control system would jump 130 percent to a total of $13.5 billion for the five years. Federal grants to airports for new runways and other expansions would climb 28 percent to $7.7 billion in the same period.
The passengers and shippers of air freight would pay these costs, and the administration would also pass on to users of the aviation system an increasing share of the Federal Aviation Administration's payroll and other operating costs. These costs are expected to increase 52 percent over the five-year period to $24.5 billion.
The administration proposal calls for users to pay 85 percent of the agency's costs through the higher fuel and ticket taxes. These taxes now pay about 57 percent of the agency's costs, with the rest being paid through general revenues.
"The users of the national airspace system are not paying their fair share of system costs," said James B. Busey, head of the FAA.
The net effect of the administration's proposals on consumers is difficult to judge, said Paul Turk of Avmark Inc., an aviation consulting firm. But he estimated that a typical ticket's price might increase as much as 5 percent. In some competitive markets that is unlikely to happen, he said.
Under the proposal, passengers would pay a ticket tax of 10 percent, instead of the current 8 percent, which is included in the cost of every airplane fare.
Airlines would also pay higher taxes on jet fuel, which also would be passed on to customers.
And local airport fees, which are now prohibited, could add as much as $12 to the cost of a round-trip voyage.
Although the Bush administration has said it opposes new taxes, it has viewed these provisions as user fees that are not included in its general opposition to tax increases because these fees decrease federal subsidies of aviation.
Many members of Congress, and most of the aviation industry, oppose increasing the federal taxes on aviation without first using a $7.6 billion surplus in the trust fund that holds the tax receipts.
by CNB