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Testimony of Henry M. Ogrodzinski
President
National Association of State Aviation Officials
before the
National Civil Aviation Review Commission
May 28, 1997

Good afternoon ladies and gentlemen. My name is Henry Ogrodzinski. I have the privilege of representing the National Association of State Aviation Officials or NASAO. Our association is very different from some of the other aviation groups from which you have heard, because we don't represent just one type of aviation. To us, general aviation is just as important as the large airlines. Small airports are as important as the mega-hubs. Business aviation and recreational aviation are simply different colors in the rich spectrum of the American transportation system. In the world of aviation advocates, NASAO has been unique since it was founded 66 years ago. We represent the men and women in the state government aviation agencies serving the public interest in all 50 states, Guam and Puerto Rico. Like you, in your roles on this historic commission, we serve the public interest.

The views I share with you today are those of the aviation professionals who are public servants across the nation. I know that Chairman Mineta has worked with many of our members during his years of distinguished public service and that Commissioners Barker and Bacon know Dave Jagim, who manages the Office of Air, Rail and Transit in South Dakota. Commissioner Griggs knows Lloyd Parr, NASAO's Chairman and the Director of Aviation for the State of Missouri.

NASAO hopes that you, in your deliberations, will keep in mind, that by every measure, our nation already enjoys the safest, most efficient, and most economical air transportation system in the world. It works very well. Let us not debate whether there is a need to fund a portion of the system with tax dollars from the general fund. There is. It is a truly national aviation system. There is a genuine public interest in the entire system and a deep and abiding federal interest in the safety and security of the entire system. All Americans, whether they travel personally by air or not, reap the benefits generated by aviation and it is one of the most important engines driving the national economy. Currently, only about 25% of the cost of the national system is borne by the general fund. That should be the absolute minimum we are willing to invest in maintaining the public's safety and security and our nation's future competitiveness.

As you know, the debate over funding FAA and the airport-airways system is, in reality, fairly new. It was generated by repeated lapses in the reauthorization of the aviation excise taxes and by some airline complaints about the 10% ticket tax. It was compounded by our zeal to balance the budget and the smoke and mirrors of so-called budget scoring. However, we must recognize that the aviation excise tax system generated ample money which was then locked up in the Aviation Trust Fund in an effort to disguise the true extent of the deficit. Aviation had no problem generating funds; only a problem in getting those funds spent on the purposes for which they were raised.

If air travelers ever lodged major complaints about the 10% ticket tax, I haven't heard about them. I have heard seven major airlines complaining about the ticket tax and about passenger facilities charges (PFC). They don't pay them. You and I do. We have heard representatives of the airlines proclaim that they will not accept any increase in PFCs. I do not presume to tell these airlines how to run their businesses. How dare they assume that they alone are qualified to dictate public policy. No matter how often these powerful businesses raise their collective voices, the simple fact of the matter is that we consumers pay the taxes. The airlines only collect them on behalf of the federal government. Please do not let your deliberations be side tracked by specious arguments.

For many years, the aviation funding system has worked well on the collection side of the equation but poorly on the delivery side. I encourage you to devise a better delivery system, but I implore you not to dismantle the part of the system that works. What FAA and the airport-airways system need most is an adequate, predictable, and steady stream of funding.

User fees have become the trend de jour. Within the aviation excise tax system we already have an elegantly simple and efficient user fee; it's called the fuel tax. General aviation, which includes all aeronautical activities outside of scheduled airlines and the military, pays a tax on every gallon of fuel consumed. Unlike the messy, inefficient, and paperwork plagued user fees in some nations, we pay our user fee at the pump. Is it fair? Sure. If you often fly long distances, you use more of the system, more fuel, and pay more taxes. If you fly only occasionally, use less of the system, you pay less.

If you feel it is necessary, modify the excise tax program. Perhaps, raise PFCs, lower the ticket tax, increase the fuel tax. Or, alternatively, explore an aviation fuel tax, in lieu of all other fees, except PFCs, and require it for all users including the airlines and military. But, please keep in mind that the excise tax system has worked well. Although they are called "taxes," they are actually "user fees". It is the Aviation Trust Fund and the manner in which it has been mismanaged that needs to be fixed.

Another trendy concept is the privatization or commercialization of the air traffic control (ATC) system. Sure, FAA's system could probably be more cost effective. We should endeavor to improve it. But do we really want to trash the best ATC system on the planet and import a system that is less user friendly and more costly for the consumer? Our nation is historically, politically, and culturally different from our neighbors around the world, their privatized systems are not the answer to any perceived deficiencies in ours. The example of NAVCANADA is repeatedly invoked by those who seem hellbent on selling off our system. NAVCANADA has been in business for only 6 months. Don't you think we ought to give them a little time to succeed or fail before we rush off to emulate their program?

The states regard themselves as full partners with the FAA in maintaining and improving our national airport-airway system. All 50 states have statewide aviation system plans. All states have airport capital improvement plans. Last year, the states spent nearly $500 million on airport capital development across the nation. It is important to note that only about 20% of those funds were used to match federal grants. The remaining $400 million consisted of direct state grants to airports, loans, and navigational aids and airport maintenance programs. The states are already investing heavily in the airport system and there are no unused coins in the states' wallet. We are very concerned about the health of our nation's airports and concerned that additional federal cutbacks will cause them grievous harm that we in the states will be unable to afford to correct. I think that you know that the states are already picking up former federal responsibilities and that more are on the way. For instance, FAA, as part of its National Airspace System Architecture, has proposed that it discontinue funding various navigational aids and lighting systems at airports across the country. If that happens, only the largest and most profitable airports will be able to pay for their lighting systems and the states will face yet another quandary over unfunded but essential aviation programs.

The Administration recently proposed an FAA budget that included only $1 billion for the Airport Improvement Program (AIP). Talking with an Administration official the other day, I said that the AIP budget was totally inadequate. I was told that I simply did not understand the political realities of this Administration and this Congress. Ladies and Gentlemen, the reality, whether political or not, is that under the current formula those airports which received AIP funds from state apportionment this year will receive 50% less next year. At least, some of those airports will enter a death spiral from which recovery may be impossible.

Last week, you heard from the FAA Associate Administrator for Airports. She had the courage and integrity to show you what will happen if AIP is reduced. She pointed out that with AIP funding at $1.7 billion, urgent projects would not be deferred, and that it would be possible to fund most safety, security, rehabilitation, capacity, and noise abatement projects. But if funding is reduced to only $1 billion, only the highest priority projects will be funded, there will be severe cuts for smaller airports, and negligible funding for noise abatement. We agree with the Associate Administrator and urge you to mandate an AIP level which will permit improvements at airports, rather than hasten their deterioration.

Mr. Chairman, ladies and gentlemen of the Commission, I envy you. You have a tough job. On behalf of the American people you have accepted a monumental challenge and an awesome responsibility. At the conclusion of your deliberations, you will have shaped a national air transportation system that will serve the public tomorrow and for generations yet to come. You will be able to tell your children and grandchildren that you had a decisive role in one of the most important debates of this decade. We, at NASAO, have every confidence in your judgment. We know that you will do the right thing. Thank you.

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