National Airspace System:

Issues in Allocating Costs for Air Traffic Services to DOD and Other Users

RCED-97-106: Published: Apr 25, 1997. Publicly Released: Apr 25, 1997.

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Pursuant to a legislative requirement, GAO reviewed the issues that must be resolved in allocating costs for air traffic services to the Department of Defense (DOD) and other users, focusing on: (1) funding options for DOD's share of costs if DOD is found to owe a payment to the Federal Aviation Administration (FAA); and (2) the potential for better management of special-use airspace.

GAO noted that: (1) in the development of user fees for air traffic services, important data, conceptual, and policy issues need to be resolved in allocating air traffic control (ATC) costs to the users of the system, including DOD; (2) accurate and reliable cost data will enhance efforts to develop cost-based user fees for air traffic services; (3) currently, FAA and DOD have limited ability to accumulate such data, and both plan to improve their cost accounting capabilities; (4) notwithstanding the deficiencies in FAA's and DOD's capabilities to assign costs, the data currently available indicate that a large portion, 55 percent of FAA's costs, are "common" or not directly related to any particular user; (5) the method for allocating common costs could have a profound impact on the costs assigned to various users; (6) policy issues, such as the effects of the allocation on economic efficiency, equity across users, and DOD's mission, are involved in determining what share, if any, of these common costs should be assigned to DOD; (7) another issue that needs to be resolved is whether and to what extent DOD's costs of providing air traffic services to civil users should be included in the development of user fees; (8) if DOD's costs are included, fees could be collected from civil users for the services provided by DOD, thereby providing an offset to what DOD may owe FAA; (9) while DOD spends considerable amounts in support of the National Airspace System, $622 million on air traffic services alone in fiscal year 1995, most of this expenditure goes to support the military mission, and only a portion of DOD's costs should be assigned to civil users; (10) a move to user fees would likely eliminate the general fund appropriation that FAA currently receives for a significant part of its budget; (11) policy issues are also involved in deciding on a funding source for DOD's share if the Department is found to owe a payment for the consumption of FAA's services; (12) one option is to require DOD to pay user fees directly to FAA; (13) in this case, DOD could be appropriated the additional funds for this payment or it could be required to absorb this expense out of its regular appropriations; (14) another option is that DOD would not pay user fees and that an appropriation would be made from the general fund directly to FAA to cover DOD's payment; and (15) FAA and DOD have different views on how various options would affect their missions and partnership in providing air traffic services.

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