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Michigan wrestles with aviation funding bills

As Michigan lawmakers work to set funding levels for the state’s support of airports, AOPA is looking to the state Senate for "refinement" of proposals amended unfavorably in last-minute House action.

On Dec. 5, the Michigan House passed a pair of bills that would fund state aeronautics programs from a fuel tax calculated on the basis of average wholesale prices. The funding method would eliminate excise and undedicated sales taxes imposed for many years on aviation fuel.

The last-minute amendment adopted by the House would reduce the proposed funding for airports by 50 percent of the original bill’s level, said Bryan Budds, AOPA Great Lakes regional manager, who expressed disappointment with the eleventh-hour action.

AOPA supports the basic approach taken by the House bills, as do the Michigan Association of Airport Executives, and the Michigan Business Aviation Association, he said. Budds added that the industry-backed funding plan had the support of the House Transportation and Infrastructure Committee—the panel that presented the bills to the full House.

The two measures, House Bill 4571 and 4572, will now be taken up by the Michigan Senate’s Finance Committee.

"AOPA is glad to see these reforms move forward, but was disappointed to see the House act on a last-minute amendment reducing funding for airports that contribute more than $4.1 billion to the state economy each year," he said. "However we remain very optimistic that the aviation funding package can be refined as the Senate takes up the legislation."

Lawmakers are seeking a new approach to funding aeronautics programs after years when Michigan’s aviation infrastructure was funded primarily from aviation gasoline and jet fuel excise taxes. Currently, general aviation pilots pay $.03 per gallon in excise taxes dedicated to support of airports, as well as the statewide 6-percent sales tax that goes to the general fund—a level of taxation that makes Michigan one of the country’s highest-taxing states for aviation.

With construction and maintenance costs continuing to rise, the Michigan aviation industry has joined forces to seek alternative solutions that keep the state’s significant aviation fuel tax rates manageable while increasing available infrastructure dollars. In 2012, AOPA supported passage of a measure that dedicated a portion of existing sales tax revenues to airports and put no more burden on pilots. But that temporary fix expired under legislative sunset provisions earlier this year, Budds said.

As the new bills move forward, AOPA continues to engage legislative leaders in the state capitol of Lansing, working in concert with numerous local aviation associations to support the state’s aviation infrastructure, he said.

Dan Namowitz

Dan Namowitz

Dan Namowitz has been writing for AOPA in a variety of capacities since 1991. He has been a flight instructor since 1990 and is a 35-year AOPA member.
Topics: Advocacy, Aviation Industry, Taxes

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