"An airport tax that some call unfair"


#1

The spin continues:

philly.com/inquirer/local/nj … nfair.html


#2

crazy :open_mouth:


#3

You can always tell bias the best by the small things…

“Teterboro, a 90-year-old airport shoe-horned between highways and neighborhoods…”

Everyone who thinks that it was the airport squeezed into the roads, homes, and buildings rather than the other way around please raise your hands.

No one?

Seriously, I could be wrong, but that would make Teterboro the exception that makes the rule.

I also suspect that a true accounting of all taxes and fees would show that Tete is likely the most profitable airport in NJ for the governments.


#4

Just imagine the havoc that would ensue if they closed down TEB! New York pax would be willing to pay much more per ticket in taxes than they are now to have the airport re-opened! If they divided up the traffic among the Big 3 airports, that’d be 193 more operations per airport they’d have to squeeze in. Perhaps JFK and EWR could deal with it, but LGA would be “terminally” gridlocked (pun intended). LGA is a mess as it is.

Yes, I understand that ALL airline pax pay a tax that go toward improvements to all airports. Just using the NYC area as an example to show the magnitude of the situation.


#5

What taxes and fee? I am trying to make a listing of what fees, etc the typical GA airport collects for the local government.


#6

I dunno where they all go but depending on jurisdiction you have some or all of the following, plus any I may have missed:

Sales Taxes on planes, parts, services, etc.

Property and/or use taxes on equipment (planes, tools, machines, trucks) and real property

Income Taxes on employees and businesses

Business taxes that are likely too many to count

Fuel Tax

Fines and Levies when anyone does anything other than by the book

Environmental fees for many items used

and don’t forget my favorite - taxes on taxes and fees (yes, there are some of these)

This does not count positive economic impact for all the business that are off airport but are dependent on the airport.

Counter that with the lack of government support for GA airports vs. what is spent on large municipal airports. When’s the last time you heard a GA airport project that cost in the billions with a B?


#7

A good discussion is the immediately preceeding thread about flying in Europe!!

But as to my question: I’m more interested in finding out what fees are specifically paid to the airport by the users.

I used to be on a committee associated with BWI airport and it was my impression (quite possibly erroneous) that fees collected by the “airport” (as opposed to by the FBO(s)) were to be used solely for the maintenance/improvement of the airport.


#8

I know our local GA field is very profitable for the county, who owns it. They get a share of user fees, avgas taxes, hangar leases, plus sales taxes for all of the on-field businesses (including a successful charter operation). It also brings in federal money for construction and airport maintenance.


#9

You do understand that all the things I mentioned are paid by the users to the airport, directly or not?

Most GA airports do not have extra fees on top of what I mentioned. Some have landing or ramp fees, but most do not. The money usually has to go through a circuitous route to get back to the airport. Because the government can’t ever get it’s books straight (they like it that way), they get to say what they want about funding sources in order to exercise power.

Many municipalities create monopolies on fuel to make money from their airports. This can be a real savior for a GA field if it is busy enough. Unfortunately, it can become a battle because the biz jets are the desirable customers, so the airport starts to crowd out the “piston trash” because it is in the way.


#10

That’s interesting. You are talking DMW, right? As far as hangar leases are concerned, is that because the hangars were built with local funds? I have been told by the area FAA rep that FAA funds are available for building hangars & I would assume that lease fees from hangars built with FAA funds would have to be used for the airport maintenance.


#11

Well yes. But that assumes that someone buys them from an FBO located at that particular airport. As to other parts and equipment, if you buy a part from an off-premises business, you may pay a sales tax – unless you order it over the internet from an out-of-state provider. And, judging by your user name you are speaking from a Canadian perspective & I have no idea what Canadian practice is.


#12

First, I no longer live in Canada.

Second, I don’t really get why it matters whether the business is an FBO or not. If the activity being taxed is directly related to the airport, and would not take place without the airport, then any government revenues from that activity are in actuality a tax on airport users.

If I buy my maps and engine oil from across the street, the sales taxes are still a tax on airport use, are they not? If you take away the airport, you lose the sales tax because the purchase won’t happen.

I suppose that some activity is done over the internet and revenue is lost, but for the most part it is all done locally. You have to try pretty hard to avoid it. The main costs are hangar, insurance, fuel, and maintenance. Good luck buying those without paying proper taxes.

While occasional flyers can ferry fuel for savings, most volume is bought by users that can’t really do that. Thus the large differences in costs at airports only tens of miles apart can remain.

The only airports that are money losers for the local governements are usually not used much. The problem with getting rid of those is that it will be hugely more expensive to replace it when the need grows enough for its use.


#13

O.K. I see the point, but it is not necessarily revenue to the jurisdiction to which the airport belongs. E.G. I buy a part in one county, the sales tax goes to the state (at least in Maryland), not to the county where the item was purchased (although they may get a small percentage of it - but I don’t believe so).

If I buy my maps and engine oil from across the street, the sales taxes are still a tax on airport use, are they not? If you take away the airport, you lose the sales tax because the purchase won’t happen.

I wouldn’t say “on airport use” - it may be a tax generated because of airport use. There is small difference in meaning there. I’d consider it to be a “tax ON airport use” if it was a tax levied in order to use the airport. For example - I consider the tax on av-gas to be an “airport usage” tax. Now if the oil above is specialized “aviation” oil, not suitable for other purposes, or the tax on it is intended to go into an aviation trust fund, I would consider that an “airport usage tax”.

I suppose that some activity is done over the internet and revenue is lost, but for the most part it is all done locally. You have to try pretty hard to avoid it. The main costs are hangar, insurance, fuel, and maintenance. Good luck buying those without paying proper taxes.

O.K. Those are the major costs of airport users. Those are the fees that really interest me. For instance on fuel - what is the amount of the tax per gallon? – does the Govt hide the amount of that tax, the way they do the tax on automotive gasoline? But maintenance can not properly be considered a cost of using the airport, although it is associated with airport usage.

While occasional flyers can ferry fuel for savings, most volume is bought by users that can’t really do that. Thus the large differences in costs at airports only tens of miles apart can remain.

I would think that “ferry-ing fuel” would not be cost effective. But you would be a better judge of that than I. The concept does bring up a question: When airlines fly, do they fill to the gills or just to the amount needed for the distance plus a reserve amount?

The only airports that are money losers for the local governements are usually not used much. The problem with getting rid of those is that it will be hugely more expensive to replace it when the need grows enough for its use.

That is interesting because at the local airport, the county keeps the airport revenue - expenses in an “enterprise fund” which is supposed to be used only for airport purposes. However, I know that there are sometimes “transfers” between other “enterprise” funds (such as water, septage, landfill). I wonder if there is some “leakage” of airport enterprise funds to other enterprise funds.


#14

The answer is, it depends. If you are flying a long distance and use something approaching full tanks, then you have to buy. If you are flying full seats and luggage in most piston planes, you can’t carry full fuel and also have to buy. When doing shorter trips, you can make a decision whether to carry more or less fuel depending on how much they charge for fuel where you’re landing. For example, in the Los Angeles, some airports charge a dollar or more per gallon than you can find elsewhere. It’s worth it to carry extra fuel into those places. My company does the same thing in our corporate aircraft - ferrying extra fuel to places that overcharge for Jet A.

I’ve not heard of the major airlines doing this because I understand that they have fuel contracts with set pricing in most major areas.


#15

The fuel tax on avgas is presently about 20 cents per gallon. States and airports add to that as they wish. The current FAA proposal is to raise that to 71 cents a gallon. Since much of us are flying for fun, we can be more choosy about where we buy because we can choose a destination based on fuel price. Business flyers, freight, charter, and ambulance usually can’t get much of a savings this way because their cost of operation includes a lot more than just fuel and maintenance. When flying for business I have a hard time avoiding 5 dollar plus fuel.

Someone else will have to fill you in on Jet fuel, but the airlines a percentage of what we do.

The proximity thing is a mixed bag. The federal government takes taxes from the whole country and spends where it wants. Your representatives try to get as much of it for your town as they can, but they may be like the Chicago mayor who sees aviation as a cheap class warfare gimmick. Different states divide up sales taxes by county or municipality or they don’t at all.

Most maintenance is done either where a plane is based, or where it is when it breaks. For upgrades and rebuilds, people often choose to fly where it is cheaper and that may mean lower taxes enter the equation. However, the most important consideration is expertise, so the game is to not drive away the businesses with taxes and fees to begin with.

Insurance is highly regulated by state.

Property and use taxes are a fun subject. People can easily move the state or county where a plane is based to avoid these taxes, and they do. Most higher dollar planes are held in LLC’s for tax and liability reasons. My LLC will never be in Texas again (I will sell my plane if I move back). The rates were reasonable, but the hassle factor was outrageous. Also, different counties can sometimes decide whether to go after the LLC’s that are really just personal planes structured for liability protection. One airport I know of used this technique to get rid of the personal planes because they were trying to attract more jet business for their fuel monopoly. It backfired in many ways, and they are now building an all new GA section on the airport.

Just about everything involved with aircraft is specialized and triple the cost of normal. Mostly this has to do with certification and tracking. If a bad batch of just about anything is found, a huge round of alerts go out and stuff all gets checked, replaced, etc.

We may have to agree to disagree, but if you are trying to say that an airport is cost or profit to a community you had better consider the sales tax and income tax and business franchise tax and unemployment tax and EVERYTHING else that involves maintenance on aircraft or you are lying to yourselves. Sure, the restaurant may not count, but the mechanics sure do. Generally, the reason to add this all up is done because someone says that another use for the property would be better for the community, and you can be sure they will add up stuff for their idea that they won’t count for the airport. The true value of the airport will likely come up in the future because its easier to deal with neighbors when the airport is there first. Try to build a new airport, and good luck. When the National Guard comes to save your butt, you don’t want them to have to drive an hour from the closest airport to get to you.

Yes, there are likely leaks in your airport fund because politicians are involved. At the county level, developers are the big players. If they want to rip up that nice juicy green patch and make millions on it, one of the first moves may be to rob that fund. Or, it may be robbed for any other reason some politician or supervisor thinks is justified to propel his career or agenda.

You might look over the aopa.org and gaservingamerica.com sites. Your local aopa representative may have info on your particular airport issues.


#16

Does anyone know the likelyhood of the FAA’s proposal coming a reality? Is it something the pres can do by executive order, or congress must pass that has the chance of being vetoed?


#17

FAA is part of the President’s administration. The fact that they are proposing it means that they have the President’s approval already. There are several free market types that think user fees are the way to go. It can more easily lead to privatizing more FAA functions.

Odds are still against it. The democrats are against privatization. They seem to realize that there will be less government control, and it cuts against their idealogy. Still, it is appealing to any professional legislator because it removes them from responsibility.

You can get the free market arguments by going to www.reason.org

I have had much correspondence with Robert Poole. He is intelligent, and very nice, but he doesn’t share my skepticism of contrived markets. He is a huge fan of toll roads too. I can’t seem to come up with a good, short, succinct argument that would immunize more free market types against the government made market disease.

As you can all tell from my posts, brevity is not my strong suit :cry:

Toll roads in my mind are a blight as well. We pay taxes for roads already. If a toll road is built to serve a need, then when will they ever build a free one for the same need? And, how do they justify imminent domain for a toll road? Now they are building the toll roads and selling them to businesses? Sure a business will run it better and cheaper most the time, but that doesn’t make the toll road right in the first place. If a business wants a toll road, they should acquire the property and build it themselves.