The Trump administration’s lackluster pledge not to raise taxes on private plane owners and small aviation businesses as part of a move to privatize air traffic control is raising concern among fiscal hawks and a Republican senator from a state with thousands of aviation jobs.
Moving air traffic control away from government oversight could introduce a degree of uncertainty for small businesses that could hurt their bottom lines, the opponents say.
Speaking at a White House event this month, National Economic Council Director Gary Cohn said the administration “probably” wouldn’t include a tax increase on general aviation — private planes owned by individuals and small businesses — as part of privatizing air traffic control.
The plan advocated by House Transportation and Infrastructure Committee Chairman Bill Shuster, R-Pa., would create a private nonprofit organization chartered by Congress to run air traffic control. It’s a system that would be similar to many other countries’ setups and is supported by major airlines.
However, Sen. Jerry Moran, R-Kansas, is worried privatizing air traffic control would leave small businesses that operate planes for tours, skydiving or other services at the mercy of a group not answerable to taxpayers. Moran is a member of the Senate Commerce, Science and Transportation Committee, which oversees the Federal Aviation Administration and other air traffic issues.
“If our airspace is privatized, the general aviation community would face constant threats of higher fees and costs, absent any oversight from the government or input from the American people,” Moran said in an email.
Moran’s home state is where Cessna, Beechcraft and Bombardier Learjet manufacture jets and aviation products. Those companies account for about 43 percent of private aircraft manufactured in the United States, according to the Kansas Chamber of Commerce. Companies such as Boeing, Airbus and Spirit have a presence in Kansas, and about 350 aviation suppliers and service providers employ about 32,000 people in the state.
Moran added that he also is worried about the effect that privatizing the air traffic control system could have on communities near smaller airports. Privatization could limit access to air transportation for many rural communities, according to the Alliance for Aviation Across America, which opposes the change.
“Rural communities, agriculture and small businesses stand to lose the most under a privatized system, where there would be no congressional oversight to ensure that all stakeholders and communities have access to air transportation,” the group wrote in a letter to congressional leaders this month.
“Under a privatized system, a private board dominated by the largest commercial operators would undoubtedly direct resources and investments to the largest hub airports and urban areas where these investments would be most likely to benefit their bottom line.”
Under Shuster’s proposal, the private company would be chartered by Congress and have an 11-member board of directors.
The board would be made up of four people appointed by major airlines, two appointed by the aircraft owners association, one appointed by the airline pilots union, one appointed by the National Air Traffic Controllers Association, two at-large appointees and the CEO of the corporation, who would be appointed by the board.
Private plane owners and pilots are also concerned about the possibility that air traffic control will be privatized because of the potential for increased costs.
Mark Baker, president of the Aircraft Owners and Pilots Association, said after President Trump released his budget blueprint that his group will keep working against the idea of privatization now that it is a stated goal of the administration.
“AOPA will review the details of the president’s proposal when they are made available, and we will continue to oppose efforts to impose user fees on any segment of general aviation,” he said.
Grover Norquist, president of Americans for Tax Reform, told Congress in a March letter that he, too, has qualms about the proposal.
Norquist wrote that taxpayers would not be protected from increased fees and taxes if a private organization were in charge of air traffic control. The 2016 version of the idea exempted some Federal Aviation Administration functions from congressional oversight, which Norquist said was a bad idea.
“Doing so could decrease the level of accountability to the public for actions taken by the new entity,” Norquist wrote.
Privatizing air traffic control is a major priority for Shuster and the Republicans on his committee. It is expected to be included in a reauthorization bill for the Federal Aviation Administration that must be passed before Sept. 30.
The idea has Trump’s support and was included in his budget outline released last month.
“[The president’s budget] initiates a multi-year reauthorization proposal to shift the air traffic control function of the Federal Aviation Administration to an independent, nongovernmental organization, making the system more efficient and innovative while maintaining safety,” the document stated. “This would benefit the flying public and taxpayers overall.”
At the White House event, Cohn argued that the United States’ land-based, radar-based air traffic control system lags the rest of the world. He pointed to Canada as having a superior system because it is based on GPS.
Privatizing the air traffic control system would hasten the switch to a GPS-based system, which is already happening through the NextGen reforms to the air traffic control system being implemented by the FAA through 2025. Moving to a GPS-based system allows for straighter flight paths and simpler elevation levels for jets that will shrink fuel costs and flight times, Cohn said.
“Everyone else in the system is going to be happy with this,” he said, referring to lawmakers such as Moran and others from states that produce general aviation aircraft. “Every other country has basically done it, so we need to catch up.”
But Moran said the promises made to private plane owners in countries such as Canada haven’t been fulfilled.
“Proponents point to Canada as the model for how ATC privatization ought to be accomplished, but given general aviation in Canada continues to pay not only aviation taxes but user fees as well, the industry has not received the fair treatment originally promised from privatization,” he said.