FAA Reauthorization and Modernization

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FAA Shutdown Not Disrupting Business Aviation

July 25, 2011

Congress adjourned July 23 without passing the 21st temporary funding measure for the Federal Aviation Administration (FAA) since its last long-term budget was approved in 2007.

“For all practical purposes, they’ve gone home,” Administrator Randy Babbitt noted in this week’s edition of the NBAA Flight Plan podcast.

Congress has been debating a long-term FAA "reauthorization" bill since 2007, when the reauthorization bill expired. Congress has passed 20 previous extensions to FAA funding as a reauthorization measure containing a long-range funding plan is adopted. Such a plan has been under discussion on Capitol Hill for months because of differences between House and Senate versions.

The expiration of FAA’s funding authority came as members of the House Transportation and Infrastructure Committee disagreed on a provision addressing the Essential Air Services program, which funds commercial airline flights to rural markets.

Administrator Babbitt was astounded.

“It’s just very disappointing to me that Congress has decided they’re going to pick a fight here,” he said. “The problem is that... 4,000 FAA employees are going to be the ones who suffer at the hands of a political dispute.”

In the short term, the FAA shutdown, which began at midnight on Friday, July 22, shouldn't be disruptive to NBAA Members, according to NBAA Senior Vice President, Operations & Administration Steve Brown. In fact, he said, many business aviation operators may not notice that a portion of the FAA has been temporarily shuttered if the congressional impasse over FAA reauthorization is quickly resolved.

Babbitt concurred with that assessment. But, he said, the longer the shutdown goes on, the more airports – especially general aviation and smaller facilities frequented by business aviation – would suffer. He pointed out that the FAA, which gives out almost $1 billion each fiscal quarter, had shut down its grant programs at noon on Friday. Construction workers building airport facilities and infrastructure funded by the Airport Improvement Program were idled until funding is restored.

As long as the FAA is without a funding mandate from Congress, business operators are left in a quandary about whether to collect taxes levied under the agency’s authority. They include the percentage tax, domestic segment fee, international arrival/departure tax and the Hawaii/Alaska tax. Babbitt told NBAA that Congress’s failure to fund the FAA will cost the government approximately $200 million a week. NBAA’s Federal Excise Tax web page has more information on how business operators’ tax collection duties might be affected by the shutdown.

While previous potential shutdowns of the FAA have been resolved in a few days with no disruption of air traffic or other essential functions, Babbitt was anything but confident a solution to the funding crisis was close at hand.

“Oh, I’m very concerned as we go on beyond Monday,” he stated, noting that Congress would not meet to discuss the matter until July 25 at the earliest. He said he was not at all confident a funding agreement could soon be reached.

Brown said that fears of massive delays in the ATC system are not realistic, since most of the FAA workers now furloughed operate in areas focused on research, equipment installations and long-term airport projects. Critical daily functions such as Air Traffic Control (ATC) services, and ATC support functions such as weather service, the ATC System Command Center and flow control would continue without disruption.