13Jan 2022 by
2 PEER REPLIES ONLY!! PEER 1 and 2 WORK IS SUBMITTED BELOW. PLEASE REPLY TO EACH PEER ADDING TO WHAT THEY WROTE. Please include a source if able and 100 words or more per peer reply.
Federal Aviation Administration (FAA) Funding
How is the U.S. aviation system funded? Would you recommend otherwise? Why or why not?
The initial post should be 250300 words and based off of the PDF below and research.
he U.S. aviation system is funded by the Airport and Airway Trust Fund (AATF). The AATF was created by the Airport and Airway Development and Revenue Act of 1970; the act was created solely to help fund aviation programs. It provides the funding for improvements to airways and airport system infrastructure. It also provides a large amount of funding for the FAA, for example in 2020, the act provided 97% of the funding to the FAA (AATF Fact Sheet). The AATF also funds the Essential Air Service program, which is a DOT program. The AATF receives the funding through excise taxes, which are charged on most costs associated with aviation travel. Examples of this include fuel taxes from both commercial and general aviation, cargo taxes, and passenger tickets. There is also a larger tax percentage charged to passengers who are traveling international than domestically. According to the FAA Fact Sheet, most of the revenue comes from the transportation of people. In 2019 $10,365 million in revenue came from the taxes associated with passenger travel.
In my opinion, I think the excise tax works well the way it is and I would not recommend major changes. I feel charging the tax excise to all users of the airspace system helps fund the necessary costs associated with the upkeep and safety of the airports and airways in the U.S. One thing that could change would be the amount of taxes charged, every year there is a surplus of funds in the AATF. According to the FAA at the end of 2019 the AATF had a surplus of 17.9 billion. However, there was a tax holiday implemented due to the COVID shut down and some of those funds were used during the tax holiday. So, I understand the importance of having some surplus.
Airport & Airway Trust Fund (AATF). Airport & Airway Trust Fund (AATF) | Federal Aviation Administration. (n.d.). Retrieved January 11, 2022, from https://www.faa.gov/about/budget/aatf
Airport and airway trust fund fact sheet – faa.gov. (n.d.). Retrieved January 11, 2022, from https://www.faa.gov/sites/faa.gov/files/about/budget/aatf/AATF_Fact_Sheet.pdf
The Airport and Airway Trust Fund (AATF) was created by The Airport and Airway Revenue act of 1970. The main purpose of the AATF was, and still is, to provide the U.S. aviation system with a consistent source of income. The AATF generates funding by implementing an aviation excise tax which essentially taxes airfare, air cargo, and aircraft fuel that is intended for commercial use. In order for the FAA to have the authority to both collect and spend money to and from the trust fund, the AATF must be authorized and reauthorized upon expiration. The FAA Reauthorization act of 2018 was the most recent reauthorization or the Aviation Trust Fund. If for any reason the authorization of the AATF were to expire, the funds within the AATF would become unable to spend. The funds in the AATF are spent on operations, facilities and equipment, research, engineering, development, and grants-in-aid for airports (AIP). At the end of the fiscal year in 2019, the AATF had a cash balance of $17.9 billion (FAA).
In my opinion, implementing an excise tax on air cargo, air transportation, as well as fuel is a good means of generating funding for the AATF to a certain extent. However, these taxes need to be kept within reason to help control and lower the costs associated with commercial aviation. What I would personally suggest is if there is a large surplus of funds the AATF could redistribute funding to commercial aviation companies with the strict intention that the funds be reinvested in the company.
Airport & Airway Trust Fund (AATF). Airport & Airway Trust Fund (AATF) | Federal Aviation Administration. (n.d.). Retrieved January 12, 2022, from https://www.faa.gov/about/budget/aatf