In your zeal to engage in the legitimate debate over the desirability of earmarked, user-tax accounts, the Post editorial of Sept. 13 on how to spend the $2.5 billion surplus in the Airport and Airways Trust Fund, or aviation trust fund as it's known in the industry, missed the point of current deliberations.
The aviation trust fund was created in 1970 to impose substantially increased federal taxes on the system users (airlines, passengers, private planes, etc.) to provide for badly needed safety and capacity improvements. the users almost unanimously agreed to those increased taxes because the legislation assured them that the revenues would go to enhancing the safe operation of our airport and airway system. The Post is entitled to its opinion that we made a mistake at that point in time. However, Congress and the president felt that this was the most expeditious and fair way to meet the system's essential needs.
Since 1970, the trust fund's primary revenue source has been the 8 percent tax on passenger tickets. While we have funded many needed improvements, we have also created the unconscionable surplus of $2.5 billion. Congress and the executive branch have been properly criticized for that surplus after aviation tragedies such as the one that claimed 144 lives in San Diego last year. It is likely that accident would have been avoided by the use of separate instrument-landing facilities (which are paid for from the trust fund) for airline and private aircraft.
But the Office of Management and Budget, under both Republican and Democratic administrations, has consistently sought to keep aviation trust fund revenues high and expenditures low. This incentive is the unfortunate byproduct of the unified budget. While the revenues from trust funds may be spent only for their earmarked purposes, the unified budget treats the funds' income and expenditures as part of the federal budget in any year, which, because of the surpluses, creates the appearance of a smaller-than-actual deficit.
Congress must very soon decide how to eliminate the aviation trust fund surplus beyond 1980. The administration favors small program increases and diversion of the majority of the surplus to the general treasury via the Federal Aviation Administration's administrative budget. I, on the other hand, favor utilizing the fund for significantly increased spending on the needs of the airway system, the development of smaller airports and the elimination of the remainder of the surplus by reducing the ticket tax from 8 percent to 2 percent. The trust fund was created with a clear understanding of how the users' tax revenues would be used. It is one thing to change the rules of the game prospectively and quite another to change them retroactively for the sake of the surplus, as the administration proposes.
I regret that your editorial ignored the other major feature of the bill I have introduced witn Sens. Packwood, Inouye, Schmitt and Goldwater. That legislation, S-1648, would "defederalize" the nation's 72 largest airports (those that board over 700,000 passengers a year). While the safety regulations of all airports would continue without change, those 72 airports, which are capable of meeting their own financial needs would make up for their lost federal monies by increasing charges on the airlines, who will in turn pass the added costs on to the passenger, who is enjoying the 8 percent tax reduction.
The net effect of both the tax reduction and increased airport charges would be a $5 billion fare savings for airline passengers over the next five years. Considering the impact on air fares of leapfrogging fuel prices, I believe this deflationary pressure is owed the airline passenger. That tax reduction, together with the removal of the federal government from the financial relationship between two sophisticated and mutually dependent businesses, add up, I believe, to a philosophically attractive piece of legislation that my colleagues and I have offered.
I respect the arguments that can be made against the concept of trust funds, which I generally support; but I contend that they do not apply to the equitable dissolution of the existing aviation trust fund balance.