Passengers already pay taxes to support all airport operations – enough is enough!
The House Committee on Transportation and Infrastructure is holding its first full committee hearing today. Chairman Peter Defazio (D, OR) has already proposed a “solution” to funding airport improvement projects. He is asking airline passengers to foot the bill. For years, Travelers United has stood firmly against increased taxation of airline passengers.
Who are the real airport users?
Airport executives and members of Mr. Defazio’s committee have asked me, “What don’t you understand about user fees?” My answer is, “Who uses an airport more? The passenger who may take off or land several times a month? Or, nearby businesses and property owners who benefit from and use the ‘economic engine’ of the airport 24/7?”
Most remain silent.
Basically, airports and local businesses have convinced Congress that taxing passengers is the fairest way to share the funding pain. But, the proper solution is to have the taxation spread across a larger slice of airport users than only passengers who often have no representation in local legislatures.
It is always easier to tax those who cannot protest rather than look constituents in the eye and tell them you are taking their hard-earned money.
Airline travel is at an all-time high.
Airports are investing heavily in renovating facilities to meet the needs of the new era of transportation and to improve the traveler experience. Passengers and other users pay taxes to help fund capital projects and contribute around $6.7 billion annually for airport improvements.
The airport community and Congress want to nearly double the $4.50 passenger facility charge (PFC) that is added to the cost of every airline ticket. Increasing the PFC to $8.50 would be a stealth tax hike – one that would fall squarely on travelers in the form of higher ticket prices. A family of four would be forced to pay as much as $104 in this additional stealth tax alone for a round-trip flight.
While airports, airlines, and Congress alike are interested in continuing to upgrade the nation’s facilities, any legislation that burdens passengers with additional taxes for such projects should not move forward. Congress should make the municipalities and businesses that benefit directly from airport activity pay their fair share in taxes. Increasing the PFC is not the answer.
Airports are amazing economic engines with plenty of funding.
Airports are more than just runways and terminals. They play a valuable role in job creation and the growth of local communities. However, the municipalities and local businesses that benefit the most from the airport-driven economy pay only a paltry sum. Passengers end up paying for virtually the entire airport’s operating budget. Not only do travelers pay the PFC, but they are taxed to pay for an Airport Improvement Fund.
The Airport and Airway Trust Fund (AATF) is also funded by passengers. In stark contrast to the bankrupt highway trust fund, it has an uncommitted balance of over $6.1 billion. The Congressional Budget Office projects this fund will grow to almost $10 billion by the end of 2020 – a record for the industry. Plus, half of the last 9/11 Security Fee increase that could be used to make lines more manageable has been hijacked to pay down federal budget debt.
Instead of taking more money out of the pockets of overburdened passengers, Congress first needs to spend what’s already in the bank.
Passengers ultimately pay for virtually all airport operations.
Passengers pay airline take-off and landing fees. Travelers also pay surcharges for taxis and ride-sharing operations. They pay extra for all purchases in airport stores as well as added fees for parking. And, their taxes are used to pay off local municipal debt incurred for airport construction.
I have never met a traveler who thought they should pay more taxes for using an airport – and the truth is, they are right. American travelers have already used their hard-earned money to fund billions of dollars in airport renovations.
By suggesting a tax hike on passengers, Rep. DeFazio is ignoring the other players in the ecosystem that benefit from the nation’s 493 airports. If more is needed, it’s time for others who directly benefit from airport growth to pony up. Congress should look to the surrounding municipalities to fund any unmet infrastructure needs.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past ten years with Congress, the Department of Transportation and industry stakeholders on travel issues. He was the consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.