Alternatives Exist to Funding the FAA, Watchdog Agency Says
Allowing the FAA to issue bonds, charge fees or spinning off its Air Traffic Organization are options, says Government Accountability Office.
House Transportation Committee Chairman Bill Shuster has promised 'transformational' reform of the FAA. (Photo: Bill Carey)

There are alternative ways of funding the Federal Aviation Administration to insulate it from the vicissitudes of the federal budget process, the U.S. Government Accountability Office (GAO) advises in a report to Congress. The watchdog agency makes no recommendations in the report, which Congress requested as it considers the next long-term reauthorization of the FAA.


Released in December, the GAO report describes the impact on the FAA resulting from the partial lapse in its funding authorization in the summer of 2011, the 23 short-term funding extensions Congress passed before approving the FAA Modernization and Reform Act of 2012, the mandatory budget cuts through “sequestration” that began in March 2013, and the partial shutdown of the federal government in October 2013.


Uncertain government funding has caused delays in the FAA’s long-running, multibillion-dollar NextGen program to modernize the nation’s ATC system. The agency has delayed until late 2016 its segment 1/phase 2 plan to deploy data communications between pilots and controllers at en route centers; slowed the rate of new procedures implemented at multi-airport “metroplex” sites; and postponed awarding contracts for its Common Support System-Weather and NextGen Weather Processor programs. However, “current segments of NextGen programs are generally on schedule,” the GAO states in “Aviation Finance: Observations on the Effects of Budget Uncertainty on FAA.”


The FAA addresses budget uncertainty through various mechanisms; for example, it can reprogram up to $5 million of appropriations within an appropriations account without congressional approval, the GAO notes. However, the agency cannot transfer appropriated funds among its four main accounts: operations, facilities and equipment, research and development and airport grants. In its Fiscal Year 2016 budget request, the FAA is seeking authority to transfer up to 10 percent of funds between those accounts.


One alternative that Congress may advance in the next reauthorization bill is to separate the FAA and its Air Traffic Organization (ATO), re-establishing the ATO as an independent entity that charges airspace users for its services. Other possibilities include authorizing the FAA to issue bonds for infrastructure projects, allowing it to charge its own user fees or providing it with more flexibility to transfer funds between accounts. Each options comes with advantages and disadvantages, the GAO says.


The report “further highlights the need for Congress to take a comprehensive look at reforming the FAA after decades of budget uncertainty and the inability to meet its critical deadlines,” said U.S. Rep. Bill Shuster (R-Pa.), chairman of the House Transportation and Infrastructure Committee. “It’s clear that we need to come together to find a new path forward that ensures that Americans can travel our skies safely and more efficiently, and that U.S. aviation is globally competitive well into the future.”


Shuster has pushed for a “transformational” change of the FAA in the next reauthorization bill, which Congress will take up early next year when it returns after the holidays. The agency’s current, temporary authorization expires on March 31.


While most major U.S. airlines represented by the trade group Airlines for America favor spinning off the ATO into an independent entity, Delta Air Lines found justification in the GAO report for its lone-wolf position that the FAA should remain intact. “Despite recent funding turmoil in Congress, the GAO report finds that NextGen programs remain on schedule—something the FAA should be applauded for,” the airline said in a statement attributed to Steve Dickson, its senior vice president of flight operations. “The report also finds that there are financing options available to Congress to consider without separating air traffic control out of the FAA and raises concerns that a new organization would greatly diminish Congressional control and oversight over air traffic control operations.”


The statement added: “Removing the Air Traffic Organization from FAA oversight in no way addresses the technical details and challenges of the U.S. air traffic system. The focus needs to remain on enhancing the FAA’s interaction with operators to continue implementing technology improvements that provide immediate and tangible benefits to customers.”