National Airspace System: Transformation will Require Cultural Change, Balanced Funding Priorities, and Use of All Available Management Tools

Since 2007 the FAA has provided an estimate of the expected compensation costs for newly hired controllers by year over a ten year period in each version of the Controller Workforce Plan. Additionally, beginning with its fiscal year 2010 budget justification, FAA is detailing the cost of controller training.

In 2006, we reported that FAA faced an $8.2 billion gap between its expected budget targets and expected spending requirements through fiscal year 2009. Under its existing budget targets set through fiscal year 2009, we reported that FAA would receive about 17 percent less each year in capital funding than it received in fiscal years 2002, 2003, and 2004. At that time, aviation stakeholders, experts, and Department of Transportation officials were discussing whether and how FAA's funding mechanism should be changed to better meet the agency's needs. Some aviation experts stated that FAA's basic relationship with Congress must change so that the agency can manage its own finances more like a business. We recommended that, after establishing a record of improved financial management, FAA explore fundamental changes that could provide greater financial management flexibility. In 2005, GAO removed FAA from its high risk list for financial management. In 2007, the administration proposed the Next Generation Air Transportation System Financing Reform Act of 2007, which would fundamentally change FAA's funding mechanism by introducing cost-based charges for commercial users of air traffic control services, eliminating many current taxes, substantially raising fuel taxes for general aviation users to pay for their use of air traffic control services, and charging commercial and general aviation users a fuel tax to pay primarily for airport capital improvements. FAA continued to push for this legislative change in 2008 as a way to better align its costs and revenues.

At the time we made this recommendation, the Joint Planning and Development Office (JPDO) was just being established and the concept of the Next Generation Air Transportation System (NextGen) was not widely accepted. JPDO officials pointed to two systems that were to be the conrnerstones of NextGen--Automatic Dependent Surveillance - Broadcast (ADS-B) and System Wide Information Management (SWIM). However, FAA's 2005 - 2009 capital investment plan eliminated funding for these new programs. Since that time, these programs have become fully funded and FAA has embraced NextGen as its modernization program.

GAO has removed FAA from its high risk list for financial management. FAA has submitted a reauthorization proposal that is based on a user fee approach in an attempt to better align the agency's costs and revenues, as well as an attempt to secure debt financing for some modernization investments. FAA has made a number of management changes to manage its finances and acquisitions in a more business-like manner and has institutionalized these changes.