Plan Would Boost Tax On Aviation Fuel From Four To Seven Percent

A major airline industry trade association has come out strongly opposed to a proposal by the New Jersey State Legislature to increase aviation fuel taxes by three percent to fund infrastructure projects in the state.

Bloomberg reports that Airlines for America senior vice president of legislative and regulatory policy Sharon Pinkerton said in a conference call that "Aviation is not a piggy bank for the legislature to use to solve their highway infrastructure problems." She said that the association is considering its legal options should the bipartisan tax hike pass.

At the same time, former FAA associate administrator Kirk Shaffer said in an op-ed pice that the plan may be a violation of FAA guidelines that requires money generated by aviation fuel taxes to be used exclusively for aviation-related projects. The state could lose federal grant money if it diverts funds to non-aviation road projects.

Pinkerton said anti-collusion laws prevent airlines from discussing business plans among themselves, and would not comment about any possible cutback of service to New Jersey should the tax plan pass as introduced.

The plan would boost fuel taxes by 23 cents per gallon, and potentially raise as much as $140 million for the infrastructure fund.

FMI: www.a4a.org