A new aviation bill introduced this month claims to modernize U.S. air traffic control with $30 billion in funding, but only 40% of that money would actually go to air traffic control systems, according to an analysis published in October 2026 by Reason Foundation's aviation policy newsletter. The Modern Skies Act, introduced by Sen. Eric Schmitt, allocates $12 billion to air traffic control while directing $18 billion to airport facilities including passenger terminals and improvement grants. The bill's structure differs sharply from Transportation Secretary Sean Duffy's original proposal, which suggested splitting the funds equally among ATC telecommunications, control tower upgrades, and airport terminal improvements.
The bill breaks down as follows: $12 billion for air traffic control, $10 billion to replace passenger terminals at no more than three medium-hub airports, $5 billion to continue an Infrastructure Investment and Jobs Act airport terminal program, and $3 billion for additional Airport Improvement Program grants. The $30 billion isn't included in the 2027 fiscal year budget request, meaning it would need to come as a budget amendment from the Office of Management and Budget. Jeff Davis of the Eno Center for Transportation noted the bill was given to Sen. Schmitt, a first-term senator who "is not particularly prominent on aviation issues," rather than being sent to the relevant congressional committees.
The report emphasizes that the federal government doesn't have $30 billion available to spend without either cutting other spending or raising user fees and taxes. Without offsets, the entire sum would be borrowed from future taxpayers, adding to the federal deficit and national debt. According to the analysis, nearly 100 other countries have made their air traffic control systems self-supporting through aviation user fees charged based on aircraft weight and distance flown, following International Civil Aviation Organization policy. These revenue streams can be bonded by air navigation service providers to finance large-scale modernization.
The analysis argues that Congress should have increased existing federal aviation user taxes, primarily the tax on airline passenger tickets, rather than adding to the deficit. The United States remains an outlier among developed nations in how it funds aviation infrastructure. Other countries' air navigation providers use weight and distance charges that generate revenue streams capable of supporting long-term bonds for major system improvements. The Federal Aviation Administration lacks this financing method, unlike government-owned utilities such as the Tennessee Valley Authority, which issues revenue bonds like private utilities despite being a government corporation.
The report concludes that reform would require separating air traffic control from the FAA's regulatory functions, similar to what the Clinton administration proposed in 1994 with the U.S. Air Traffic Services Corporation. Such a structure would allow the ATC system to function as a government utility with bonding authority while keeping safety regulation independent. Until then, the pattern of deficit-financed aviation spending is likely to continue.