"Higher taxes, fees concern private pilots"

["Stephen Irwin" <stepheni@xxxxxxxxxxxxxxxxxxxxxx>]

Monday, June 4, 2007

Higher taxes, fees concern private pilots
By Noelle Leavitt
The Denver (CO) Business Journal


The U.S. Congress is expected to pass legislation by Sept. 30 increasing
fuel taxes and user fees --and the effects on Colorado's general aviation
economy could be severe. 

Making it more expensive to fly private planes would hurt corporate jet
business travel, agricultural crop spraying on the Eastern Plains and
accessibility to medical professionals in rural areas, said Travis Vallin,
aeronautics director for the Colorado Department of Transportation. 
 
A jet fuel tax increase alone would hurt Colorado's economy because pilots
and smaller businesses wouldn't be able to afford fuel, Vallin said. 

On Sept. 30, the Federal Aviation Administration's tax collection and funds
distribution to the air transportation system nationwide expires. Thus
Congress is compelled to act to renew the FAA's authority. 

The FAA also is looking at how to modernize its system operations as
passenger travel increases; the FAA expects 1 billion U.S. passengers
between now and 2015. Fuel taxes, passenger fees and user fees would pay for
modernization. 

If passed, the new funding would last for five years. 

The Senate passed a funding bill, S. 1300, on May 16. The House will offer
its own bill this month, then a joint committee will decide final language
for one bill for Congress to consider. 

S. 1300 proposes a 50-cents-per-gallon jet fuel tax increase for
turbine-powered general aviation aircraft; it exempts piston engine planes. 

Commercial airlines, which believe they pay too big a portion of all
aviation costs, suggested the change. 

"The commercial airline passengers are supporting the corporate fat cats,"
said David Castelveter, spokesman for the Airlines Transportation
Association, an airline lobbying group. "We're paying about 94 percent of
the cost." 

According to the FAA, commercial airline passengers pay about 95 percent of
aviation taxes while using only 73 percent of its services -- while
corporate jets use more services than for which they pay. 

The FAA proposes that general aviation users pay a higher share of air
traffic control services. But aviation managers at Centennial Airport in
Aurora say there's a flaw in the bill's language. 
 
"General aviation does not use air traffic control as much as [commercial
airlines]," said Robert Olislagers, executive director of Centennial
Airport. 

Because smaller planes don't use air traffic control during each portion of
a flight, Olislagers said general aviation doesn't use nearly as much air
traffic services as do commercial airlines. 

"You have to remember, the airlines are shifting pension costs," Olislagers
said. "I think the bottom line is the airlines need to get their own
economic house in order." 

For commercial airlines, S. 1300 would drop the current 7.5 percent tax on
the cost of passenger tickets as well as the 4.3 cents-per-gallon fuel tax. 

"General aviation throughout the state of Colorado would continue to slow
down," Vallin said. Also, due to rising fuel costs, "year to date we're down
about 23 percent in our sale of general aviation fuel," he said. 

If the proposed fuel tax is approved for general aviation, jet fuel sales
could decline 15 percent to 20 percent, damaging general aviation in
Colorado, Vallin said. 

Aviation had an economic impact of $23 billion in Colorado in 2003,
according to the Aeronautics Division of CDOT. 

Denver-based Aspect Energy LLC uses a turbine Falcon 50 jet that seats eight
people, and transport its executives weekly to business meetings worldwide. 

"General aviation is an extremely efficient way of getting to certain places
that have poor air service," said Alex Cranberg, president and chairman of
Aspect Energy LLC. "We have operations in other parts of the world that are
extremely difficult to get to." 

In addition, the Senate bill would impose a $25 approach fee per flight on
general turbine jets. 
 
But after that, the setting of future user fees would fall to a new Air
Transportation System Advisory Board, created by the bill. The board would
consist of representatives from airports, air carriers, general aviation and
the public. 

Companies such as Aspect Energy LLC can afford that fee, Cranberg said. His
beef has to do with who will implement fees after the bill is passed. 

"In general I have a concern with taxes that are set by an administration,"
he said. 

The Airplane Owners and Pilot Association and National Business Aviation
Association Inc. agree, and also are worried that a committee could impose
more fees as time goes on.

   Post your opinion on this story in the CAA General Aviation Forum
http://www.californiaaviation.org/dcfp/dcboard.php

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