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March 3, 2000, Friday, Final Edition

SECTION: A SECTION; Pg. A04

LENGTH: 714 words

HEADLINE: Panel Backs Airport Passenger Tax Boost

BYLINE: Eric Pianin; Alan Sipress , Washington Post Staff Writers

BODY:

House and Senate negotiators agreed yesterday to boost the airport passenger tax by $ 1.50 per head as they removed the last major obstacle to a new three-year, $ 40 billion bill funding federal aviation programs.

Bargainers split the difference between the House, which called for increasing the charge from $ 3 to $ 6 a ticket, and the Senate, which wanted no increase. The rise in the passenger facility charges will provide $ 700 million more a year for local airport construction projects around the country.

"It's obviously a glass half full," said David Plavin, president of the Airports Council International. "We're better off than we were before by a significant amount." The Federal Aviation Administration (FAA) legislation has been caught for the better part of a year in a standoff between House Transportation Committee Chairman Bud Shuster (R-Pa.) and Senate leaders including Commerce Committee Chairman John McCain (R-Ariz.) and Budget Committee Chairman Pete V. Domenici (R-N.M.).

Under the current funding system, money generated from the airplane fuel tax is pumped into an aviation trust fund, but the money technically can be used for anything in the budget. Shuster had insisted that these funds be exclusively dedicated to aviation construction projects, essentially forcing Congress to agree to an increase in aviation spending to cover FAA operations. Senate leaders saw that as both a potential budget buster and an intrusion on the power of the appropriations committees.

Under pressure from Senate Majority Leader Trent Lott (R-Miss.), the two sides announced a breakthrough late Wednesday after Shuster agreed to modify his plan. He did extract a commitment from the Senate negotiators that the aviation trust fund will for the first time be used exclusively for aviation construction projects; on the other hand, senators refused to separate the aviation fund from the rest of the budget, as Shuster wanted as a way of permanently guaranteeing an increase in aviation spending.

As part of the agreement, the two sides agreed to a significant boost in spending for the FAA and aviation programs. Negotiators have agreed on $ 12.7 billion of aviation spending in the coming fiscal year, a $ 2.7 billion increase over the current level.

Shuster wanted the full amount guaranteed. Instead, he will be assured of access to only $ 10.6 billion of projected aviation trust fund revenue. It will be up to the members of the appropriations committees to decide whether to allocate the additional $ 2.1 billion--although Senate budget officials said they likely will do that.

"It gave us a lot less than we wanted," said Scott Brenner, a spokesman for Shuster. "But the chairman's primary goal through this whole thing was to make sure the dedicated taxes we pay are used for that specific purpose. You pay aviation tax, you use it for aviation. That's what he got, so he's happy with that."

Domenici hailed the agreement as "the right arrangement." He said Shuster's original plan would "just wreak havoc with the budget and with priorities that have already been set."

Many senators are still furious with Shuster for leading a revolt two years ago that forced GOP leaders to back a huge increase in highway spending and to agree that future gasoline tax revenue would be used exclusively for road and bridge projects.

The compromise aviation bill also includes a proposal to add 24 daily takeoffs and landings at Reagan National Airport, including half going beyond the current 1,250-mile limit on flights at the airport. While local officials have resisted the increase partly because of concerns over airplane noise, McCain has doggedly pushed for more flights as a means of fostering airline competition.

Advocates of an increase in passenger facility charges had argued that the added revenue would enhance airline competition by paying for improvements at smaller airports that have limited service. But opponents, most vocally McCain, had resisted any boost as a regressive tax increase.

"An increase of PFCs from $ 3 to $ 4.50 is extremely helpful," said Jonathan J. Gaffney, vice president of the Metropolitan Washington Airports Authority, which runs the Dulles International and Reagan National airports.

LOAD-DATE: March 03, 2000