Airport Funding: What Came First, The Pilot or The Runway?

News & Information You’ll Want To Know In Ohio, Michigan, Indiana, Illinois, Wisconsin, Minnesota, North Dakota & South Dakota

by Bryan Budds
Manager, AOPA Great Lakes Region

Over the past several years, you’ve probably noticed many of my columns in Midwest Flyer Magazine talk about AOPA’s interaction with state legislators on the importance of both competitive aviation tax rates, but also on the importance of adequately funded general aviation airports. In the coming months as legislative bodies in all of the eight states of the Great Lakes Region convene their 2015 sessions, these aviation funding and tax questions will again be explored in several states.

Recently, Ohio’s aviation industry and lawmakers have debated ways to address a long-term decline in resources available for the Ohio Airport Grant Program. The program is used to provide state matches to Federal Aviation Administration (FAA) Airport Improvement Program (AIP) grants, but also can be used to provide direct grants to airports that may not be eligible for AIP funds.

According to the Ohio Aviation Association, the Airport Grant Program has an annual budget of less than $1 million available for distribution – far less than many neighboring state grant programs. Since the majority of the available funds come from aircraft registration fees and occasional legislative allocations, it has become difficult for airports to accurately plan future improvements.

On the other hand, pilots and aircraft owners, in addition to their aircraft registration fees, are paying a sales tax of 5.75% on their aviation fuel – a relative rarity among states. At $6.00 per gallon, that is a tax of nearly $0.35 per gallon. At this rate, current estimates of annual sales tax revenue collected from aviation fuel ranges from $8 million to $14 million annually, yet very little of that money is spent by the State on airports.

In the not so distant past, proposals in Columbus all targeted aviation fuel and pilots for a tax increase to address the airport funding issue. We were told to expect anywhere from a $0.05 per gallon increase to something much higher, including a percentage increase. At that time, AOPA spent additional time in Columbus explaining the current issue from the perspective of a general aviation pilot and successfully prevented any tax increases on general aviation pilots.

Within the last year, AOPA, the Ohio Aviation Association, and several other organizations have formed a coalition to finally address the issue without causing an unwarranted burden on general aviation pilots and aircraft owners – knowing that airports need pilots just as pilots need airports.

Clearly, if fuel tax rates continue to climb, pilots would likely purchase fuel in some of the many more much competitive neighboring states, limiting activity and revenue at Ohio’s airports. In the same line of thinking, if the condition of Ohio’s airports decline, pilots will have no airports from which to operate.

This classic chicken and egg problem is not unique to any one state. But, I have seen in my travels that airport managers and pilots usually do not see eye to eye on what would be most beneficial to aviation – stronger airports or fewer taxes. However, given that so many states are looking for funding in every possible account, fighting for the benefit of all aviation is something we must come together to do now more than ever and I think we have set that stage in Ohio.

With an easy target of the existing sales tax revenue already being collected, AOPA and the Ohio Aviation Association have sought a proposal to eliminate the sales tax on aviation fuel and put a much more manageable and dedicated excise tax on aviation fuel – allowing the State Department of Aviation to have several million more dollars for airport improvements while reducing the tax burden for pilots.  This collaborative nature is one that I feel is a winning attitude for how we all can contribute to the strength of general aviation long into the future.

If you have any thoughts on the issue, please let me know at bryan.budds@aopa.org, twitter.com/aopagreatlakes, or at AOPA’s Homecoming Fly-In in Frederick, Maryland on Saturday, October 4, 2014.

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