This is part of a letter I received from Senator Harry Reid after expressing my concerns about the proposed FAA funding issue.
Thank you for contacting me to express your concerns about proposals for reforming the Airport and Airways Trust Fund. I appreciate hearing from you.
Reauthorization of the Federal Aviation Administration (FAA) and other aviation programs will expire at the end of the Fiscal Year 2007. Among the expiring provisions is the existing aviation tax structure, which provides revenue for the Airport and Airways Trust Fund.
Currently, airline passenger ticket taxes are the main source of trust fund revenue; however, other revenue is also derived from taxes on fuel and cargo shipments. From 2000 to 2003, the trust fund experienced a $1.3 billion decrease in revenue primarily due to reduced commercial airline passenger traffic. Increased operational costs for the FAA may also contribute to future shortfalls.
As you noted, the Bush Administration's Fiscal Year 2008 budget request included a direct user fee system proposal that would likely require usage fee contributions from the general aviation industry to the Airport and Airways Trust Fund. I understand your concerns about this fee structure. You might be interested to learn that the Chairman of the House Infrastructure and Transportation Committee, Representative James Oberstar (D-MN), has stated that he believes this proposal would result in almost $600 million less in revenue than maintaining the current tax structure.
When I have the opportunity to consider FAA reauthorization legislation and the Fiscal Year 2008 budget in the Senate, I will be certain to keep your concerns in mind.
Again, thank you for taking the time to share your thoughts with me. For more information about my work for Nevada, my role in the United States Senate Leadership, or to subscribe to regular e-mail updates on the issues that interest you, please visit my Web site at http://reid.senate.gov. I look forward to hearing from you in the near future.
My best wishes to you.
Sincerely,
HARRY REID
United States Senator
HR:sn