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President Biden's 2025 budget request to Congress included several components relating to the aviation industry, and some groups are divided on their response. The NBAA feels some proposals, including a fuel tax increase, would harm the industry, while the FAA focused on the many investments to boost aviation safety.
On Monday the White House released its proposed budget for fiscal year 2025, which included numerous proposals relating to the aviation industry. The U.S. Department of Transportation said the budget will protect and build upon the millions of jobs created and inflation reduction, lowering costs for working families while making the wealthy and corporations pay their fair share. RELATED STORIES:Biden targets jets in State of the Union, aviation groups fire backIRS plans dozens of audits over corporate jet usage
With the budget proposal, NBAA President Ed Bolen is again calling out the administration, saying many of the proposals included in the budget would harm an essential American industry.
"The Biden administration's sweeping plan would hurt business aviation and the jobs and communities that depend on it, and make it harder for U.S. companies to compete in a global economy," Bole said. "Among the proposals that single out business aviation for onerous treatment is a five-fold fuel tax increase, even though current fuel taxes already cover the incremental cost imposed on the aviation system. We urge Congress to tell the president that his gambit won't fly with the citizens, companies and communities that rely on business aviation."
The DOT said the budget has taken a critical step in stabilizing funding for the National Airspace, "which has largely been disproportionately funded by commercial air travelers." The DOT reported that commercial passengers pay a 7.5% tax on the prices of their tickets, plus a passenger facility charge of up to $4.50. Private jet users only pay fuel surcharge taxes, which is roughly $0.22 per gallon of jet fuel. Private jet flights make up 7% of those handled by the FAA but only contribute 0.6 percent of the taxes that make up the Airport and Airway Trust Fund, according to the government. The proposed phased-in fuel fee in the budget will increase to $1.06 per gallon for private jets over five years, the first update in decades. According to AP News, the proposal would raise $1.1 billion over five years.
Bolen noted that the BizAv sector supports 1.2 million jobs and contributes $250 million to GDP. Business aircraft are used to optimize efficiency, productivity and flexibility, largely by small to mid-sized companies and often by the President's Cabinet members. Often, BizAv flights carry personnel and clients to areas with little to no airline service.
The FAA took a different approach, focusing on how the budget would build on the agency's safety priorities by allowing it to hire more air traffic controllers, modernize the country's infrastructure and strengthen FAA oversight.
"Our number one priority is safety," FAA Administrator Mike Whitaker said. "It supports our efforts to increase air traffic controller hiring, modernize aging air traffic facilities, and enhance our safety oversight."The IRS previously announced it was to begin auditing tax filings of corporate jet users, which Biden noted in his recent State of the Union speech. Groups like the NBAA challenged his comments, claiming he unfairly singled out the business aviation industry and said the IRS's plans to audit businesses over private jet usage was "an attempt to broadly paint with a negative brush the thousands of U.S. companies of all sizes that rely on business aircraft to effectively compete in a global marketplace."
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The budget would provide $43 million to hasten hiring and training for air traffic controllers, helping the FAA meet its goal of hiring 2,000 new controllers in 2025. The FAA surpassed its goal of hiring 1,500 new controllers in 2023 and is on track to hire 1,800 in 2024. The agency has acted to expand the controller pipeline and meet the country's air traffic demands. The programs include year-round hiring for experienced controllers from the military and private industry, enhancing the Air Traffic Collegiate Training Initiative to hire more candidates to begin training immediately following graduation, filling each seat at the FAA Academy, and deploying upgraded tower simulator systems.
There will be a large investment in the safety and resiliency of air traffic facilities and equipment, building upon the Bipartisan Infrastructure Law funding being used to improve airport infrastructure and FAA facilities around the U.S. The budget will also include a new Facility Replacement and Radar Modernization proposal to dedicate $8 billion over the next five years, starting with $1 billion in 2025 to replace or modernize aging ATC facilities, including the modernization of 377 critical radar systems and over 20 ATC facilities.
The recapitalization program will provide more funding more reliability and stability to ensure that the national airspace system remains the safest and most efficient in the world. There will be $1.8 billion included in the budget for the Office of Aviation Safety to support production oversight and continued operational safety. This follows the FAA's actions following the Jan. 5 Boeing 737 MAX 9 depressurization incident, involving bolstered oversight and proposed budget boosts to the FAA's resources for continual safety improvement.
The budget also includes proposed investments to support clean energy products, like sustainable aviation fuel. The budget will provide $325 million to support research and development, as well as the demonstration of technologies and processes, to increase the domestic supply of crucial sustainable materials needed for several clean energy technologies. Additionally, the budget will provide over $500 million for green aviation at NASA, as well as other funding to support climate research at NASA.