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The Federal Aviation Administration (FAA) operates one of the safest air transportation systems in the world, but this system is under growing strain as the demand for air travel increases. Recognizing the need to transform this system, Congress created the Joint Planning and Development Office (JPDO), housed within FAA, to plan and develop the Next Generation Air Transportation System (NextGen). The current authorization for FAA, the Airport and Airway Trust Fund (Trust Fund), and the excise taxes that support the Trust Fund will expire September 30, 2007. Reauthorization bills in the Senate (S. 1300) and the House (H.R. 2881) identify various revenue sources, including flight surcharges and certain fees, to fund FAA, including NextGen. Concerned about the need for stable, sustainable financing for the nation's multibillion-dollar transportation infrastructure investments, including NextGen, GAO has designated transportation financing as high risk. GAO's statement addresses (1) the extent to which the current funding structure can support FAA's activities, including NextGen, (2) the implications of selected provisions of proposals to fund aviation activities, and (3) issues that could affect the overall cost of NextGen. The statement is based on recent GAO reports and testimonies, updated through interviews with FAA officials and stakeholder representatives.

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