Aviation Bill Runs Into Turbulence Senate Measure Cuts Fuel Tax or Airlines, More Than Doubles It for the Rest of the Industry
July 30, 2009
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  • By Rob Kundert


    A bill in Congress that would mean a $1 billion tax cut for commercial airlines is being hotly contested by smaller airports, pilots and businesses that say it comes at the expense of general aviation, which covers everything but commercial and military flying.

    The U.S. Senate Commerce Committee has drafted a Federal Aviation Administration Reauthorization Bill, S. 1300, that will eliminate the 4.3 cent per gallon jet fuel tax for airlines while more than doubling the tax on turbo-prop and turbine jets, primarily used by businesses, from 21.8 cents to 49 cents per gallon and instituting a user-fee system. Some of the money would go to modernize the nation’s air traffic control network.

    “The system we have in place today is funded by light general aviation, corporate aviation, airlines and passengers. It is fair, equitable and effective,” said Bob Grierson, Dubuque Regional Airport manager. “Our existing user tax system will provide sufficient funds for modernization and system growth without resorting to new tax schemes which could devastate corporate aviation in Iowa and the rest of the United States.”

    Grierson is a member of the Alliance for Aviation Across America, a group of his colleagues as well as elected officials, pilots and local businesses.

    “Our members oppose any change from the current fuel tax system, any new fees or increased bureaucracy. We also oppose any proposals that would include a tax hike that would pay for a tax cut for major airlines,” said, Selena Shilad, a spokeswoman for the Alliance.

    The group supports a different FAA funding bill passed by the U.S. House Transportation and Infrastructure Committee, H.R. 2881, co-sponsored by Rep. Bruce Braley, D-Iowa, that maintains the existing tax system, with slight increases to general aviation.

    “Congress doesn’t have to levy an unfair tax on small businesses, pilots and small airports like Dubuque Regional to modernize our nation’s air traffic control system,” Braley said. “I don’t believe that implementing the Senate’s proposed across-the-board user fees and steeply increased taxes on general aviation is fair to Dubuque aviators.”

    A vote on the House bill could come up before the end of the month. Meanwhile, the Senate Finance Committee, with Sen. Charles Grassley, R-Iowa, as its ranking member, is reviewing the Senate Commerce Committee bill and might have its own version before the August recess.

    “General aviation uses just about every small airport in every state,” said Earl Draayer, manager of the Le Mars Airport in Le Mars, Iowa. “We are suffering from high fuel prices and high insurance now.”

    Date: 2007-07-21