Airport Woes and Trust Fund's 'Surpluses'
There is a deepening suspicion among air travelers that the delays and frustrations they are experiencing at busy airports are the result of a conspiracy -- a conspiracy hatched in Washington. Rumors abound that the government is diverting funds earmarked for better aviation to reduce the deficit. That the Federal Airport and Airways Trust Fund has an uncommitted balance of $5.6 billion is often cited as proof that something fishy is going on.</br></br>In truth, however, this uncommitted balance, or "surplus," is not a surplus at all. It is an optical illusion created by focusing on the trust fund and not on total spending for federal aviation.</br></br>The trust fund was created to finance capital improvements at the nation's airports, to modernize the computers, radars and other equipment used by air traffic controllers, and to defray part of the costs of operating and maintaining the air traffic control system. It also was designed so that those who enjoy the benefits of modern air travel would be the ones to pay, rather than the general taxpayer. Accordingly, the fund's revenues come from an 8% tax on airline tickets, taxes on aviation fuels, and interest earned on cash in the fund.</br></br>Understandably, aviation users, who have steadily been paying taxes into the trust fund, would like to know why it has a large and growing uncommitted balance. Contrary to popular opinion, it is not because the administration has been hoarding the money in an attempt to reduce the federal deficit. In fact, fiscal 1987 aviation user taxes of $3.2 billion were less than estimated spending of $5 billion for the Federal Aviation Administration, thereby increasing the federal deficit by $1.8 billion. The trust-fund balance has grown because Congress has forced the government to use general fund revenues -- including personal income taxes -- to pay for aviation programs, instead of allowing money to be spent out of the trust as intended.</br></br>Congress created this situation by putting "penalty provisions" into the 1982 law that authorized the trust fund. First, Congress limited the amount of money that could be paid out of the trust fund to a percentage of funding for airport improvement. Thus, only about 71% of FAA costs could be paid for out of the trust fund, even though several studies have shown that those paying into the fund account for about 85% of that agency's costs. Then, Congress reduced that even further by tying trust-fund spending for operational costs, such as air traffic controllers, to the amount of money spent each year for capital-improvement programs, such as replacing outdated computers.