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NTU Warns Against Bigger Government Burdens on Air Travel

by Pete Sepp / /

The Honorable John Thune, Chairman
Committee on Commerce, Science, and Transportation
United States Senate
512 Dirksen Senate Office Building
Washington, DC 20510

Dear Chairman Thune:

During the Committee’s preparations of the Federal Aviation Administration reauthorization bill for floor action, Members may be considering an increase in the Passenger Facility Charge (PFC). On behalf of National Taxpayers Union’s (NTU) members across America, I write to offer our perspectives and concerns over such proposals, which, we understand, may not be accompanied by reductions in federal funding for the Airport Improvement Program or other types of taxes or charges. Raising the net government tax and fee burden on air travel, which is already incredibly onerous, should not be among the policy options the Committee is considering.

It may be true that economic factors have eroded the buying power of a PFC since its last increase to $4.50 in the year 2000. Yet, FAA data shows that overall PFC collections have still managed to climb 80.5 percent between 2000 and 2013. This trend is almost twice as fast as the increase in the Consumer Price Index for All Urban Consumers, plus the rise in passenger enplanements at primary U.S. airports, over the same period (2013 was the most recent year for consistent data on all three factors when NTU last conducted this analysis).

There are other ways to measure this trend, such as comparing the PFC’s value 16 years ago to a construction cost index. The problem with doing so is that flawed government policies, such as project-labor rules and antiquated building regulations, can help to drive up those indices even as materials get more expensive.  Indeed, it is within the purview of Congress – especially Members of this Committee – to address some of the root causes behind higher construction costs in a direct, pro-taxpayer manner.

Unfortunately, it is also true that since the year 2000, Americans have been hit with increases in the plethora of government-authorized levies on air travel. The most recent imposition more than doubled the passenger security fee as part of a revenue-raising exercise in the Bipartisan Budget Act of 2013.

Whatever mix of taxes, fees, and charges Congress decides to permit on air travel, and whatever the merits or drawbacks of PFCs may be, lawmakers have a special responsibility to ensure that the net bottom-line cost of government on an airline ticket and system users does not grow worse. Indeed, that cost could actually shrink if current legislation incorporates pro-taxpayer reforms such as replacing FAA-funded air traffic control with a user-based system, further expanding private security screening contracts at airports, and reexamining lower-priority FAA programs.

The typical middle class air traveler now pays a far higher average tax rate on an airline ticket than he or she does on a 1040 income tax return. Congress should be working to remedy, rather than worsen, this situation with comprehensive reforms that respect all stakeholders in the aviation system.  

Sincerely,

Pete Sepp, President

cc: Members of the Committee