Michigan would free up millions of dollars to invest in its aviation system without raising taxes on aircraft operators if a funding reform plan passed by the state Senate gets a favorable reception in the House of Representatives.
Revamping Michigan’s general aviation airport funding as proposed in the package’s five bills would increase the state aeronautics fund balance by approximately $5 million annually, said Bryan Budds, AOPA Great Lakes regional manager.
“This increase addresses a shortfall at the Michigan Department of Transportation’s Office of Aeronautics and strengthens its ability to provide state and local matches for FAA Airport Improvement Program grants,” he said.
Another key provision of the package offers a remedy for Michigan’s noncompliance with its obligation to follow FAA policy on the diversion of revenue. “The policy states that any taxes collected on aviation should be returned to the system that collected it,” Budds said.
The proposed funding formula calls for depositing one-third of Michigan’s 6-percent sales tax on aviation fuel in the aeronautics fund and qualified airport fund. The remaining two-thirds of the tax revenue “is constitutionally dedicated to other uses,” Budds said. Approval allows the state to greatly increase its competitiveness when seeking FAA grants.
AOPA has strongly advocated for the funding reforms, working cooperatively with the Michigan Association of Airport Executives and the Michigan Business Aviation Association.
Passage would allow the state to take “a strong step forward,” Budds wrote in a letter to House Transportation and Infrastructure Committee Chairman Peter Pettalia (R-District 106), whose panel will consider the package next.
On Dec. 2, AOPA testified before the Senate Commerce Committee, where the package of bills was approved unanimously. The next day, the full Michigan Senate approved the package unanimously and delivered the bills to the House.
“AOPA members are appreciative of the great work of the Michigan Senate, and in particular of Senator Wayne Schmidt (R-District 37), chairman of the Senate Appropriations Subcommittee on Transportation, for his dedication to the long-term viability of the state’s airport system,” Budds said. “We look forward to continuing to work with the senator and his colleagues in the House of Representatives.”
The package includes Senate bills SB-418, SB-425, SB-426, SB-612, SB-613, and SB-614.