No user fees in President’s budget proposal

For the first time in years, President Obama’s annual budget proposal does not include any new user fees for general aviation.

It’s a decision applauded by GA’s advocacy groups.

“After years of fighting to protect pilots from arbitrary fees and charges, we’re pleased to see that the White House has finally taken our message to heart and acknowledged that user fees on general aviation are a non-starter,” said Aircraft Owners and Pilots Association President Mark Baker. “This is a big victory for the future of general aviation, but we’ll continue to keep a close watch to make sure this bad idea doesn’t re-emerge as it has in the past.”

The past three budgets from the Obama Administration proposed a $100 per flight user fee for GA, but that idea has met with strong opposition, including general aviation supporters in Congress who have repeatedly written to the White House insisting they would not support such a fee.

Opposition to the fees has been voiced from the state level as well, according to officials with the National Business Aviation Association (NBAA). In recent years, several governors, from both political parties, have written the president to tell him that user fees would do more harm than good. More than 100 mayors from across the country have likewise expressed opposition to user fees with the White House.

“With the release of this newest budget from the White House, it appears to us that the president is backing away from user-fee proposals, and that our efforts are making a difference,” Bolen continued. “That said, we know that we still have work to do on issues like the president’s proposal for changing the depreciation schedule.”

The White House budget proposal, released Feb. 2, contains language, which states: “Airplanes not used in commercial or contract carrying of passengers or freight, such as corporate jets, generally are depreciated over five years. The administration proposes to increase the depreciation recovery period for general aviation airplanes that carry passengers to seven years.”

Bolen noted that Obama has often erroneously refered to the long-established tax policy — set by the IRS and approved by Congress decades ago — as a “corporate jet tax loophole,” which many say is a misleading and inaccurate characterization of business aircraft depreciation schedules.

“The president has repeatedly misstated the facts about this business aircraft tax policy, and it doesn’t make sense to single out one industry, as he does in his latest budget, without the benefit of careful analysis of the impact his proposal would have,” Bolen said. “The fact is, economists and others have long agreed that depreciation schedules that allow deductions to be taken closer to when a purchase is made incentivize many kinds of capital investments, including aircraft. The current depreciation schedule does just that, which not only helps American businesses be more competitive, but also preserves jobs in America’s vital aircraft-manufacturing industry.”

The 2016 budget proposal includes a $15.8 billion request to fund the FAA and its activities, including the search for an avgas replacement, air traffic management, operations, airport infrastructure and NextGen modernization. In making the request, the White House notes that the funds would be an investment in the future of aviation, an industry that accounts for more than 5% of the nation’s gross domestic product.

The budget proposal seeks $2.86 billion for facilities and equipment, including $845 million for NextGen-related capital investments — a $53 million increase over 2015 spending levels. The proposal calls for funds to be set aside for NextGen, including $13 million to expand performance-based navigation within metroplex areas, $45 million for the continued implementation for ADS-B and $139 million that would pay for needed satellite subscription services.

For research, engineering and development activities, the President’s budget proposes $166 million in funding. Included in that is $6 million to continue research efforts needed to transition from avgas to an unleaded replacement fuel.

The budget proposal does call for a funding reduction in one critical area: Airport improvement program (AIP) grants, according to AOPA officials.

The proposal would set a $2.9 billion obligation limit for the program, a decrease of $450 million from 2015 levels. But the money would be focused on smaller commercial and general aviation airports that don’t have access to other revenue sources, AOPA officials note.

At the same time, the budget proposal would nearly double the passenger facility charge at all commercial service airports from $4.50 to $8. It would also eliminate guaranteed AIP entitlements at large hub airports, giving them more flexibility to generate alternative funding streams.

“Overall, this budget proposal represents good news for programs that are critical to general aviation, especially in terms of the removal of user fees” said Jim Coon, AOPA senior vice president of government affairs. “But, it is important to remember that this proposal is just the beginning of the budgeting process. Congress will now review and either accept or dispose of these requests. AOPA will continue to be heavily engaged in working with lawmakers to ensure that the final FAA budget for 2016 and the longer-term FAA reauthorization process account for the needs of general aviation now and for years to come.”