reprinted from:
Clinton changes his tune
By Glen Johnson WASHINGTON- Airline travelers will likely see their ticket prices increase if the Clinton administration gets its way. Not only does the Transportation Department want to let cities and states raise an airport construction tax from $3 to $5 per stop, but its new budget proposes creating $1.5 billion in user fees for air traffic control. At the same time, the administration plans to fight attempts to spend a $6.8 billion dollar surplus expected in the nation's aviation trust fund. That money, generated by different ticket taxes, is itself supposed to be used for airport construction and other aviation improvements. The president wants to keep the extra funds to balance shortfalls in the federal budget- the kind of maneuver he said was "as wrong as can be" while he was governor of Arkansas. "It's regrettable that with so substantial a balance in the aviation trust fund, the administration finds it necessary to impose new taxes on the traveling and shipping public," said Edward Merlis, head of legislative affairs at the Air Transport Association, an airline trade group. "Why not spend the money you're collecting first, then determine if you need more, rather than imposing the taxes first and then figuring out where to spend it?" Merlis added. Passengers May Feel Cost While the bulk of the air traffic control fees probably would be paid by airlines, Merlis said some of the cost could trickle down to passengers. In releasing his departments $45.5 billion fiscal 2000 budget on Monday, Transportation Secretary Rodney Slater said repeatedly that the administration supports "record level" investments in aviation, but new taxes and fees are needed to make systems more user-based. He said President Clinton would strongly oppose spending all of the aviation trust fund surplus- as some in Congress favor- because it would not be fiscally responsible. "We've got to take much of this to the Congress and work out how we provide long-term, sustained funding for the aviation system," Slater said. "But I think we can do that and I think we can provide record-level funds for that effort." Paying for Local Improvements In reality, much of the aviation system is already paid for by is users. When passengers buy a ticket, they pay an 8 percent federal tax on the fare. In addition, they pay a $2 federal fee for each leg on their trip, which can add up over a round trip with several connections. All that revenue is deposited along with freight and fuel taxes in the federal Airport and Airway Trust Fund. In addition, the Transportation Department lets city and state governments assess a $3 airport construction tax. Known as the passenger facility charge, it can be used only for improvements at a local airport. Under current law, passengers cannot pay more than $12 in PFCs per trip- equal to four $3 charges. The administration is now proposing to raise the PFC cap to $5 per stop and $20 per ticket. The transportation budget for the fiscal year starting Oct. 1 also proposes creating $1.496 billion in aviation user fees. The budget does not spell out how the program would work, but Slater was expected to add detail today during a speech in New York. A Growing Fund While the PFCs would be retained by local governments, the new user fees would roll into the Airport and Airway Trust Fund- an already burgeoning account. As of Sept. 30, the fund had a surplus of $4.3 billion. In its new budget, the administration projects the surplus will rise to $6.8 billion by Sept. 30, 1999, and to $8.2 billion by Sept. 30, 2000. As Arkansas governor, Clinton complained about the federal government withholding gasoline tax receipts to "make the federal budget deficit look smaller." "The Congress took that money from us under a solemn contract to turn right around
and give it back to be spent only on roads- federal highways," Clinton said. "It
is just as wrong as it can be, and we ought to stop it." |
