Federal Aviation Legislation
February 2006
Speaking on federal aviation legislation and funding topics before the NCSL Transportation Committee in Chicago on December 8, 2005 was Henry Ogrodzinski, President and CEO of the National Association of State Aviation Officials (NASAO). Henry expressed appreciation for the invitation to speak and lauded the good working relationship between NCSL and NASAO over the years. The successful passage of the two recent aviation authorizations (AIR-21 and VISION 100) shows the effectiveness of this partnership. In 2007, the current four year authorization for the Federal Aviation Administration (FAA) and the Airport Improvement Program (AIP) expires and NASAO will again be seeking the support of NCSL and other groups to back a strong reauthorization bill.
According to Mr. Ogrodzinski, NASAO is currently working with the FAA on an MOU that will define a national framework for land use around airports. He said that inappropriate land uses such as cell phone towers and housing too close to airports can diminish and even kill airports. Because zoning is largely a local and state issue, the framework will seek to define the various roles and responsibilities of various involved parties.
He said that the Transportation Security Administration has been reorganized again for the fourth time on four years. He is encouraged with the creation of a new Office of Transportation Sector Management Networks at the Department of Homeland Security that will specifically assess the security needs of various transportation modes. He said that the FY 2006 FAA funding bill was signed on November 30, 2005. It included many earmarks which he thinks are bad for aviation.
The bill provides a total of $3.55 billion in total spending including an extra $550 million for the AIP, $71 million for the administration of the FAA, $10 million for the small community air service program, $10 million for research, $2.54 billion for facilities and equipment and $100 million for the Essential Air Service program (EAS) which subsidizes airline service into certain smaller communities.
He said that 10,000 annual enplanements is the minimum that an airport must meet in order to receive AIP funding. But due to various security and airline industry issues, many airports are losing enplanements and many will drop below the minimum to receive federal money.
He sees a fight ahead for reauthorization in 2007. Large cuts were proposed by the Administration but did not pass the Congress. The FAA's budget is very tight for FY 2006. He hopes for a bipartisan effort to continue to improve the aviation system in the years ahead.
Mr. Ogrodzinski said that the FAA believes that a change in the current funding system is needed. The main source of revenue for the FAA and the aviation programs he mentioned is the 7.5 percent excise tax on airplane tickets and it doesn't generate enough funding. More user fees on various parts of the system may be a part of the solution, but new fees would create a strain on the general aviation community. Fuel tax is another source, based on how much fuel is used and paid at the pump. When prices rose rapidly, the airlines asked for a tax holiday from the aviation fuel taxes, but NASAO opposed it. In reality, this source of funding may need to be increased down the road.
The Air Transport Association (ATA), which represents the major airlines, has asked for the elimination of federal funding from airports that don't have commercial service. He feels that the airlines are like dinosaurs, flailing around and blaming other entities for their problems including general aviation, which would suffer from the ATA proposal. Rather than targeting general aviation fields for cuts, NASAO would rather work with the airlines for more workable solutions.
There are serious aviation problems in the wake of Katrina and Rita. The estimated $250 billion cost of rebuilding will put pressure on aviation funding needs. He sees a financial train wreck with all these costs couples with the Iraq war and the large federal budget deficit.
For the future, he expressed the need to rebuild the coalition that successfully pushed for the last very successful reauthorization. A five-year bill is needed for stability. $3.6 billion is needed for AIP. NASAO will be wary of new user fees on general aviation. He believes there should be a stronger general fund contribution to aviation to pay for FAA's operations, which was not originally a part of the Aviation Trust Fund. Currently the general fund contribution is 8 percent of the total aviation budget.
He quoted a Wall Street Journal article saying that the airlines have weathered the storm and will be profitable in 2006. A potential golden age of aviation is dawning with a very bright future. A group is studying the next 30 years in aviation to address the demand of tripling the number of people using air transportation. It's likely that fewer aviation employees will be needed in the future as technology advances.
One trend worth noting is more fractional ownership of business jets, which is increasing the number of such jets being purchased and used.
Another development is the creation of "very light jets" (VLJs) that are fast and efficient for trips under 500 miles. A new company, Pogo, has bought several VLJ to run people around at about the cost of a first class ticket. He also mentioned Cirrus, a fiberglass plane that is being purchased by new flyers. It comes with a parachute that can land the plane if needed.
In conclusion, he said that there is a critical need to continue to fund aviation infrastructure. NASAO will be getting its initial reauthorization proposal out in January 2006 to circulate among those interested in working on the reauthorization issue. He welcomes the continuation of the good working relationship between NCSL and NASAO. The NASAO website is http://www.nasao.org/.
 2005 Fall Forum Presentations
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