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Executive Summary
Statement
to the
National Civil Aviation Review Commission

The Coalition for Fair FAA Funding believes that it is now time to replace the outmoded and inequitable aviation ticket tax with a fair, stable usage-based tax system of FAA financing, and we are committed to paying our fair share of FAA costs under this new system, because,

•  Financing reform is a fundamental element of overall FAA reform: The FAA itself needs to operate in a business-like manner in order to become a more cost effective provider of air traffic management services. By tying the FAA's funding to measurements of actual system use, rather than to the wholly unrelated cost of airline tickets, the link between the FAA and its customers will be dramatically strengthened and the FAA will gain a stable source of revenue; and
• Passengers deserve an equitable aviation tax system: The aviation ticket tax is fundamentally inequitable because it forces passengers who pay higher fares -- whether as a result of their destination, their date of purchase, or their carrier of choice -- to pay a disproportionate share of the costs of FAA services. As a result, passengers traveling the same route, even passengers on the same plane, pay wildly different amounts for exactly the same government service. Travelers to and from small communities are hardest hit by the ticket tax because they fly on less-traveled routes with higher per ticket charges. Under a usage-based tax system, all passengers would pay only for the FAA services they use -- no more, no less.

 This new usage-based financing system must not, however, increase the total tax burden imposed on the air carriers and our passengers. Any financing plan that raises additional revenue would amount to a new tax on the flying public in order to pay for federal expenditures that are wholly unrelated to the FAA and the ATC system. Instead, Congress and the Administration need to remain focused on their stated objectives in reviewing the structure of aviation taxes -- to create the right incentives for improved operations at the FAA and to create a tax system that is more equitable for the flying public.

The Coalition proposed last June an interim user tax formula that would replace the existing ticket tax dollar-for-dollar. While we believe that the principles embodied in this proposal are sound, we welcome a full debate regarding alternative formulas and are willing today to support a reasonable alternative usage-based tax system that replaces the ticket tax dollar-for-dollar. Indeed, we are willing to provide new alternative usage-tax formulas to you or to any other policy makers in order to promote a full debate on this important issue.