National Passenger Fees & Taxes Supporting Small Arkansas Airports

by Bob Porterfield: The federal gov't has taken billions (B) of dollars from the taxes and fees paid by airline passengers every time they fly and awarded it to small airports used mainly by private pilots and corporate executives. Some of these “general aviation” facilities used the federal dollars - more than $7B over the past decade - for enhancements such as longer runways and passenger terminals aimed at drawing traffic. . . . the money comes with little oversight and at the expense of an increasingly beleaguered air transportation system. “They’re making out like bandits,” said Bob Poole, director of transportation studies at So. CA’s Reason Foundation and author of several studies on air transportation costs. “It’s not only that airline passengers are paying more than their fair share, but they’re being overtaxed to give private jets a free ride.” Passengers pay as many as six separate taxes and fees on a single airline ticket, adding up to more than $104B since 1997 . . .

Small airports in Arkansas with limited or no commercial activity have received more than $48.8 million (M) since 2005 in federal taxes and fees from passengers, according to the review. The Rogers Municipal Airport, which houses corporate jets for the nearby Wal-Mart Stores Inc., headquarters, has collected $9.4M since 2005 - Arkansas’ top recipient of such federal funding among smaller airports. The airport’s fixed base operator - or FBO, a service area for aircraft - is Beaver Lake Aviation, a subsidiary of Wal-Mart Stores Inc., and is home to the Wal-Mart Aviation fleet. And airport officials predict business will continue to grow; they’ve created an $80M master plan that would expand the facility and extend the airport’s 6,011-foot runway. Most of those improvements would be paid for by the Federal Aviation Administration’s Airport Improvement Program (AIP), which is primarily funded by fees from passengers on commercial flights.

Other Arkansas beneficiaries of the AIP offer limited commercial service, such as the airports in El Dorado and Jonesboro. Both airports, which received several million dollars between them, offer daily Mesa Airlines flights. . . . The elimination or reduction of the subsidy isn’t an issue Sen. Blanche Lincoln (D-AR), is pushing for, the senator’s office said Friday. Sen. Mark Pryor (D-AR), is a member of the Senate Commerce Committee and will be involved in crafting the FAA’s reauthorization bill. “One of my priorities is to ensure adequate funding is available to maintain and improve our runways, airports and air safety,” Pryor said. “It is my goal to work in a bipartisan manner to provide a practical solution that is fair for consumers and aviation stakeholders, and allows Arkansas to meet its growing transportation demands.”

. . . Mark Cooper of the Washington-based Consumer Federation of America said the key question is whether passengers are paying for something and getting nothing in return. “It costs me more to park my car at National Airport than it costs to park a corporate jet,” he said. . . . A study released in February by the FAA said it cost $2.4B just to provide air traffic control for private and corporate planes in 2005. Yet the industry contributed just $516M in fuel taxes that year. Another $500M annually pays for weather forecasts and other preflight data for private pilots. These contribute to overall air safety, according to Andy Chebula, ... at the Aircraft Owners and Pilots Association, which represents more than 410,000 pilots and is lobbying heavily for retaining passenger taxes. If private pilots have to start paying for such things themselves, they just won’t bother, Chebula said.

Congress now is considering new approaches to financing the FAA before its funding expires Sept. 30. The House and Senate Aviation subcommittees have been conducting hearings on the topic since February. The FAA wants to scrap many existing passenger taxes and replace them with higher fuel taxes and user fees that would put more of the burden on noncommercial aviation. . . .

Other Arkansas airports receiving AIP funds: Walnut Ridge Regional, $2.8M (2005) & $332.5K (2006); Saline County/Watts Field, near Benton, $2.7M (2005); West Memphis Municipal, $2.6M (2006) & $1.8M (2005); El Dorado So. Arkansas Regional / Goodwin Field, $2M (2006) & $867K (2005); Stuttgart Municipal, $1.7M (2006); Jonesboro Municipal, $1.7M (2005); Baxter Co. Regional in Midway, $1.4M (2005); Hope Municipal, $946K (2005); Drake Field in Fayetteville, $928K (2006) & $278K (2005); Magnolia Municipal, $893K (2006); Osceola Municipal $785K (2005); Morrilton Municipal, $713K (2005); Thompson-Robbins Field in Helena-West Helena, $688K (2005); Warren Municipal, $675K (2006); Bentonville Municipal, $665K (2006) & $534K (2005); H L Hopkins-Fordyce, $622K (2006). [Full Article]

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