Bill would reform aviation funding in Michigan

June 22, 2011

AOPA is supporting a Michigan bill that would strengthen the state’s aviation industry by dedicating aviation-derived fuel tax revenue to a fund for reinvestment in the statewide aviation system. House Bill 4025 was scheduled to be the subject of a hearing June 22 before the House Transportation Committee.

The bill would change the current system whereby aviation-derived tax revenues go directly to the state’s general fund, providing little benefit to the aviation system. It would ensure not only that aviation fuel tax revenue is reinvested in aviation infrastructure, but also that the future of the overall aviation system remains healthy.

The legislation marks a departure from past legislative sessions in which attempts were made to raise the already high aviation fuel tax rates—replaced now by a positive effort to preserve Michigan’s vibrant general aviation industry.

"AOPA is seeking to change the conversation—in Michigan and in statehouses across the country—about the role of GA in the economy and the effects of over-taxation on an already stressed industry,” said Mark Kimberling, AOPA director of state government affairs. “The first inclination in this case was to increase the excise tax on fuel, despite the fact that avgas prices are sky-high and the 6-percent sales tax they also impose on fuel amounts to one of the highest aviation fuel tax rates in the nation: over 40 cents a gallon. Now, with this bill, we're urging the legislature to instead direct a portion of the existing tax back into aviation and keep airplanes flying, businesses and goods moving—and, most importantly, keep people working."

AOPA Great Lakes Regional Representative Bill Blake has been working with the bill’s primary sponsor, Rep. Dave Agema, to move the bill forward, urging House Speaker James Bolger and members of the Transportation Committee to support the legislation so critical to aviation in Michigan.

Greg Pecoraro, AOPA vice president of airports and state advocacy, urged Transportation Committee Chairman Paul Opsommer to support the bill in the interest of preserving the $4 billion impact GA has on the state economy.

“Michigan’s aviation fuel tax rates are among the highest in the nation, yet vital investment in the aviation system continues to decline,” he wrote in a June 21 letter. “As one of only 15 states that impose a sales tax on aviation gasoline, Michigan should be well positioned to support investment in its airports. House Bill 4025 would correct this situation by guaranteeing that aviation-derived tax revenue is reinvested in the maintenance and improvement of existing airport infrastructure.”