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April 10, 2009

Texas Aviation Association Supports SB 467

TXAA News Release
April 10, 2009

There is a bill currently in the finance committee of the Texas senate called SB 467. In part, it proposes to earmark existing aviation related taxes collected by the state, for airport development. Presently, these taxes are delivered to the general fund.

SB 467 would take a certain percentage of the taxes currently collected and place them in a special fund to develop all airports in Texas. These taxes are presently levied toward aircraft sales, aircraft parts, services to aviation, concessions at airports and franchise fees. The bill does not ask for new fuel taxes or increases on current tax rates but simply to earmark some of those funds for airports. A similar law was passed a few years ago for the Texas Parks and Wildlife department and has successfully benefited their programs.

The bill was introduced by Senator Judith Zaffirini D-Laredo.

Summary from supporters of the bill:
Texas is among the few states in the country that does not fund its airports from a dedicated airport development fund. What state money is available comes from the Texas Department of Transportation. State funds have been level at $16 million for the past three years. The majority of the money available for general aviation airport development (70%) comes from FAA funds with the remainder coming from local governments that own the airports (11%).

Implementing a change in how the state sales tax on aviation and air transportation- related products and services is used would provide a larger and steady revenue stream for airport development. It would presumably keep up with rising costs and inflation as the cost of goods and services increases and the tax revenues collected would be closely related to its use. As the state-allocated amount has remained the same for three years, the state’s purchasing power has eroded. This has occurred at a time when prices for concrete, steel and other construction materials have seen noticeable increases.

The level of funding for the last year available (2006) would have increased from its current $16 million to approximately $70 million. This would allow more money, approximately $54 million, to be available for all airports in the state including those currently eligible for state and/or federal funding. It would also provide funding for airport projects at the smaller commercial service airports that often are not able to generate on-airport revenue like their larger counterparts but still have compelling development needs. These include apron space, terminal upgrades, air cargo facilities, and other airside and landside improvements. Many of the state’s smaller commercial service airports are functionally large general aviation airports in terms of their activity and ability to generate revenue. They provide the only access to the community for corporate aircraft that have facilities in the area or do business in the area. Their commercial service consists of two to twelve commuter flights per day in turboprop or small regional jet aircraft that connect the community to the large hub airports in Houston or Dallas.

An aviation-related sales tax would raise significantly more money for stated funded airport development than is currently available. It would provide additional funding opportunities for the state’s smaller commercial service airports that serve as the economic engines of their regions. Most importantly, this source of revenue would provide the closest link with the actual users of the airport system.

The Texas Aviation Association supports this bill as it will benefit all of Texas general aviation and our economy. Studies by Wilbur Smith Associates demonstrate that Texas airports contribute millions of dollars in the form of economic impact to local communities. The money produced by airports supports jobs and industry to every town with an airport.

Here are files that state the bill and a white paper from supporters.

Resolution No. 2008-R-028


A Concept Paper for Providing Additional Funding for Airport Development in Texas: Using an Aviation-Related Sales Tax to Fund Airport Improvements

John Happ, manager of Easterwood Field Airport (CLL) and a supporter of the bill adds, “I recommend that as many as possible call the Finance Committee and express support for this Bill. The Finance Committee's number is (512) 463-0370.”

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