Posted on: February 21, 2012
Our tax dollars ...
We often remark that a lot can happen in five years, but it is also remarkable, when looking at certain government functions, how much can not happen in five years.
In this space five years ago, we congratulated the FAA for trying to come up with a new way to finance the government's aviation programs, including the transition to an air traffic control system based on GPS technology, the so-called NextGen system.
At the time, the FAA was looking for alternatives to the conventional method of taxing air travel. The FAA had come to believe that it made little sense to finance air traffic control with a ticket tax pegged to the fare level, because fares had little or no real relation to the cost of air traffic control.
It was true then, and it's true today. As we said at the time, if a 100-seat jet flown by a discount airline imposes the same costs on the air traffic control system as a 200-seat jet full of business travelers paying full fare, then a tax based on the fare is a poor way to finance the system.
What the FAA had in mind was a user fee approach, whereby airlines and users of private and corporate aircraft would pay a fee more directly related to their usage.
Alas, this seemingly reasonable notion did not survive the opposition of airlines and other users. When the Obama administration came into office, it ran away from this controversy as fast it as it could.
Fast-forward five years. The 144-page FAA Modernization and Reform Act of 2012, which President Obama signed last week, continues the status quo on aviation taxes because nobody in the administration or in Congress, -- or in the industry, for that matter -- wants to fight that battle.
As it is, it took Congress four years to come up with this legislation, even with no taxes on the table.
In addition to the mundane task of authorizing some $63 billion in aviation expenditures over the next four years, including $11 billion for NextGen, the bill calls on the Transportation Department (DOT) and the Government Accountability Office (GAO) to take certain actions and investigate various things.
These initiatives will be bearing fruit soon.
The new law directs the DOT, for example, to create a toll-free version of its consumer complaint phone number and require airlines to print the number on e-ticket confirmations and on signs at airport ticket counters.
The law also requires the GAO to conduct a study on the timeliness of checked baggage delivery and the feasibility of establishing performance standards and a compensation scheme.
The GAO was also ordered to investigate whether there are other ways to collect airport Passenger Facility Charges, the locally imposed airport financing fees that are, under existing law, added to the fare and shown on the ticket.
The FAA was ordered to conduct a study of in-flight cellphone use in countries where it is permitted, to determine the impact.
Also, Congress decreed that airlines cannot impose a fee for the carriage of musical instruments as carry-on baggage, and must allow musicians to buy a seat for large instruments that don't weigh more than 165 pounds. Why Congress couldn't simply ask the DOT to look into the matter is a question we won't ask, but the 165-pound limit is now set in concrete, for better or worse.
Let it not be said that Congress can't tackle the tough issues.
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