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Obama Administration Releases Budget Proposal

On April 10, the Obama administration unveiled its fiscal year 2014 budget proposal, which contained several policies strongly opposed by the aviation industry.

President Obama requested $15.6 billion to fund the Federal Aviation Administration (FAA), including a very slight increase (0.6 percent) above the FY 2013 appropriated levels for the operations account.  However, the devil is in the details.

The administration once again seeks to increase the depreciation recovery period for general aviation airplanes that carry passengers to seven years.  ARSA and the broader aviation industry have strongly opposed similar efforts in the past because of the economic impact it would have on general aviation.  Currently, aircraft not used in commercial or contract carrying of passengers or freight, such as corporate jets, are depreciated over five years.

Additionally, the president recycled another proposal that would detrimentally impact general aviation.   The administration’s budget establishes a new surcharge for air traffic services of $100 per flight.  The budget assumes this fee would raise $605 million in FY 2014, rising to $836 million in FY 2023.  Similar to altering the general aviation airplane depreciation schedules, user fees have been widely disparaged by lawmakers and the aviation industry.

Finally, the Obama administration is pursuing increased commercial passenger ticket fees to fund aviation security and deficit reduction.  Many, including the major air carriers, believe increasing ticket costs will result in less commercial air travel.

For better or for worse, the recent trend has been that presidential budget proposals carry little weight on Capitol Hill.  Nonetheless, ARSA will continue to work with our industry allies to ensure the aviation sector isn’t unfairly targeted by policymakers.



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