FAA Financing: Issues and Options in Deciding to Reinstate or Replace the Airline Ticket Tax
T-RCED-97-56
Published: Feb 04, 1997. Publicly Released: Feb 04, 1997.
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Highlights
GAO discussed issues related to the financing of the Federal Aviation Administration (FAA), focusing on the: (1) status of the Airport and Airway Trust Fund; (2) issues raised by the coalition of the nation's largest airlines to replace the tax on domestic airline tickets with fees on domestic operations; (3) potential effects of the coalition's proposal on domestic competition; and (4) potential competitive impacts of alternative options for financing FAA.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| The financing alternative that is finally selected should be relatively easy to administer and help ensure that, in the long term, FAA has a secure funding source, the nation's airports and airways are used as efficiently as possible, commercial users of the system pay their fair share, and a strong, competitive airline industry continues to exist. Ultimately, it will be a policy call for the Congress to decide on how to achieve these goals. |
Closed – Implemented
|
On February 28, 1997, the President signed the Airport and Airway Trust Fund Tax Reinstatement Act of 1997. The Joint Committee on Taxation and FAA estimate that the act will generate $3.5 billion in additional revenues for the Airport and Airway Trust Fund in FY 1997. In a December 1996 report, February 1997 testimony, and a set of briefings and direct assistance to congressional committee staff during the period leading up to the statutory action, GAO played a critical role in congressional reinstatement of the excise taxes that finance the Trust Fund. |
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Air transportationAirlinesCommercial aviationCompetitionCost analysisExcise taxesTrust fundsUser feesAirportsTaxes