Kingsport Times News Wednesday, April 23, 2014

Business & Technology

Alliance: Raising aviation fuel tax would have 'devastating effect'

April 10th, 2007 8:45 pm by Hank Hayes



A newly formed national group warned Tuesday that the Federal Aviation Administration's finance reform plan - which includes proposed higher taxes on aviation fuel - could have a "devastating effect" on small towns and locally operated general aviation businesses.


Representatives with Alliance for Aviation Across America held a conference call with reporters to outline their opposition to the FAA's reauthorization proposal projected to triple the aviation fuel tax from about 20 cents to approximately 70 cents per gallon.


"We know airports are essential to every community," said Henry Ogrodzinski, president and CEO of the National Association of State Aviation Officials. "They are the community's front door. Without them, there would be very little business, industry or tourism coming into those communities. They are a lifeline. ... General aviation (GA), as robust as it is, is fragile and those kinds of fees will have a crippling effect on GA."


The FAA's plan has come under attack in Northeast Tennessee from Tri-City Aviation owner Don Carter, who runs his general aviation business that includes aviation fuel sales at Tri-Cities Regional Airport.


The FAA claims its plan will eliminate the domestic passenger ticket tax and generate revenues based on the costs users impose on the air traffic system - whether they are commercial, business or general aviation users. The FAA also claims its proposal will support development of a new satellite-based air traffic control system called "NextGen." The tax system that funds the FAA and its programs expires on Sept. 30.


The alliance opposing the FAA's plan includes representatives from the League of Rural Voters, National Farmer's Union, National Agricultural Aviation Association, National Business Aviation Association, and the Aircraft Owners and Pilots Association.


"This special interest legislation would benefit no one but the big commercial airlines," Gene Wright, mayor of Quinwood, W.Va., said of the FAA's plan.


Interest groups like the Air Transport Association, which represents the nation's leading airlines, support the FAA's plan.


Wright, a contract pilot, said a number of West Virginia coal companies and health care professionals regularly use private planes.


"I've been told by some they may have to cut their travel by 50 percent," Wright said.


Alliance members also questioned whether the FAA's plan was really just a first step toward a highly controversial effort to privatize the air traffic control system, reduce congressional oversight, and give the airlines considerably more control over the day-to-day management of the system.


The airlines' justification for the FAA's plan is that somehow a small turboprop carrying three passengers imposes the same costs on the air traffic control system as a jumbo jet carrying 300 passengers even though all independent data show it's the design of the airlines' hub-and-spoke system creating the bulk of air traffic control costs, alliance members maintain.


"The airline-backed plan is a poison pill for rural towns and communities across America. This huge tax hike would ground many of these small planes and puddle jumpers that are the lifeline to these communities, impacting access to specialized medical care, disaster relief and business resources," said Niel Ritchie, executive director of the League of Rural Voters.


For more about the alliance go to www.aviationacrossamerica.org.


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