Every time a rocket takes to the skies carrying satellites or supplies for the International Space Station, air traffic controllers on the ground must take critical steps to ensure commercial and passenger aircraft remain safe.
The controllers, hired by the Federal Aviation Administration, close the airspace, provide real-time information about the missiles and their debris, then reopen the airspace quickly after the launch is complete.
But unlike airlines, which pay federal taxes for the work of air traffic controllers every time their planes take off, commercial space companies don’t have to pay for their launches. That includes companies like Elon Musk’s SpaceX, which has launched more than 300 rockets over the past 15 years that often carried satellites for its Starlink internet service.
The Biden administration is trying to change that. President Biden’s latest budget proposal, released last month, proposes that for-profit space companies begin paying for the use of government funds.
Commercial space companies are exempt from aviation excise taxes that fill the coffers of the Airport and Airway Trust Fund, which pays for the FAA’s work and will receive about $18 billion in tax revenue for the current fiscal year. The taxes are paid primarily by commercial airlines, which charge 7.5 percent of the price of each ticket and an additional fee of about $5 to $20 per passenger, depending on the destination of each flight.
Mr. Biden’s budget proposal promises to work with Congress to overhaul the tax structure and share the cost of running the nation’s air traffic control system. His promise is based in part on an independent safety review report commissioned by the FAA that advised the federal government to update excise taxes to charge commercial space companies.
“Whenever SpaceX launches a flight, it requires massive air traffic control resources to clear the airspace for hours around the launch window,” said David Grizzle, author of the safety report and former chief operating officer of the Air Traffic Control Agency, an agency . within the FAA that hires the controllers. “Again, it pays zero.”
SpaceX did not respond to multiple requests for comment.
Mr. Biden’s call for an overhaul of the decades-old excise tax structure is part of his push to make the wealthiest Americans and wealthy corporations “pay their fair share.” In his State of the Union address last month, Mr. Biden also called for higher taxes on private and corporate jet users, including raising the tax they pay on jet fuel to $1.06 a gallon from 21, 8 cents per gallon over five years. That fuel tax currently makes up about 3 percent of the trust’s annual revenue, which largely depends on what commercial airlines and their passengers pay.
But commercial space companies don’t contribute to that fund or share any of the costs borne by the public when rockets are launched, said William J. McGee, a former FAA-licensed aircraft dispatcher and senior fellow at the American Economic Liberties Project. consumer advocacy group.
“This is a matter of fundamental fairness,” Mr McGee said. “It would be the equivalent of having a toll system on a highway and passing some users through and not others.”
Missile launches are a time-consuming process for the FAA, former air traffic controllers say. The agency must create a detailed plan outlining the exact airspace to close and reroute planes before launch. Controllers also need to respond quickly if something goes wrong.
“Think of a space launch as being similar to a hurricane landing,” said Michael McCormick, a former air traffic controller who worked for the FAA for more than three decades and now teaches at Embry-Riddle Aeronautical University.
Hurricanes disrupt plans, closing airports and forcing planes to reroute. Missile launches require equally complex planning by controllers, Mr. McCormick said.
“In Florida — which is also one of the busiest commercial aviation corridors — you can start to see some very real system impacts,” said Michael P. Huerta, who was FAA administrator under both Govs. Obama and Trump. the chairman of the safety review board that drafted the report. Commercial rockets now primarily fly from Vandenberg Space Force Base in California and Cape Canaveral, Florida, near Orlando.
The number of space launches has skyrocketed in recent years, led by SpaceX, which puts dozens of satellites into Earth’s orbit every month. In recent years, parts of NASA’s missions have also been outsourced to commercial space companies that carry supplies to the International Space Station.
In 2023, the FAA oversaw 117 launches, a significant jump from a decade earlier, when there were only 15 flights. More than 30 rockets have been launched so far this year, putting 2024 on pace to surpass last year’s tally. The launch count includes US rockets launched from New Zealand, whose space agency regulates launches on its soil with the FAA
The increase in launches is also prompting the FAA to devote more resources to overseeing and licensing space activities, which is separate from the work of air traffic controllers. The administration is asking for $57 million in authorization and licensing for the commercial space industry for fiscal year 2025, up from about $37 million spent in 2023. The FAA added 33 new employees to its office of licensing and industry oversight last year.
Commercial space companies reject Biden administration’s proposal to pay aviation taxes. Industry insiders say it’s still at a nascent stage when most businesses are struggling to break even. They also point out that the missiles only take about 15 seconds to fly through the airspace, and that the volume of missile launches is still negligible compared to the roughly 16 million flights the FAA manages annually.
Taxing the industry “is not appropriate at this time,” said Karina Drees, president of the Commercial Spaceflight Federation, the industry group that represents more than 80 companies and universities. “The commercial space industry, working closely with the FAA regulator, continues to improve the coordination of launch activity and avoid unnecessary impacts on US airspace.
But Mr. Huerta and Mr. Grizzle said Congress should start looking at ways to tax the industry in anticipation of a boom in launches that has already begun.
More missile launches add pressure to an air traffic control system already marred by underfunding, staff shortages and overworked staff, the authors of the independent security report said. Dozens of near-collision incidents reported last year — in which commercial airliners came dangerously close to each other — have shown that the FAA’s safety margins are already shrinking.
The combination of staff shortages and insufficient funding for new equipment “presents a perfect storm for more serious incidents,” Mr Grizzle said. The situation “will only get worse as the proliferation of new entrants who pay no taxes at all” continues.
The FAA said in a statement that the agency is “committed to safely handling rapidly growing space operations while minimizing disruption to the flying public.”
