Economist urges less general revenue, more user fees to support air travel

By Eric Sundquist

The use of general revenue to support highways, transit, and intercity rail is familiar. Now with the across-the-board cuts dictated by the federal budget sequester, it’s also clear how much air travel relies on non-user revenue.

Disruption in air travel has been one of the major downsides of the sequester highlighted by the administration.

Harvard economist Edward Glaeser suggests that this news is an opportunity to wean the system from general revenues. About 70 percent of the FAA’s funding comes from charges related to use, while the TSA covers only about a third of its costs with user fees.

A stronger user-based system, Glaeser argues, would be fairer, would direct resources where they are most needed, and would protect the system from uncertainty in Washington.

Glaeser writes that  “a $3-a-segment fee would cover the shortfalls due to the sequester. Given all the fear-mongering about multi-hour lines, many airline riders would be thrilled about an alternative that costs them only six bucks round-trip.”

“Such a fee should be only the start of reform for TSA and FAA funding,” he concludes. “Fliers don’t need any more subsidies from Congress — nor do they need the uncertainty that comes with those subsidies.”

Eric Sundquist is Managing Director of SSTI.