Strategic Policy

Consumer, Taxpayer and Air Traveler Advocates: No Airport Tax Increases

March 25, 2019

WASHINGTON, March 25, 2019 – Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, along with representatives from Travelers United, Americans for Tax Reform and The Global Business Travel Association joined together today at an event in Washington D.C. to urge Congress to reject any effort to raise the Passenger Facility Charge (PFC), or airport tax, unnecessarily. To view excerpts from the event, click here.

Tomorrow, the House Transportation and Infrastructure Committee is scheduled to hold a hearing exploring airport infrastructure construction and the potential for increasing the PFC – or the Airport Tax – paid by the 2.4 million people who travel by air every day. Ahead of tomorrow’s hearing, A4A Senior Vice President for Policy, Sharon Pinkerton released the following statement:

“Thanks to the significant resources provided by air passengers, American travelers and commerce enjoy a healthy airport system. All across this country, airport construction is booming. That’s why with roads and bridges crumbling in America, the idea of a new tax increase on air passengers is misguided and simply needless.

“Any fair hearing on this issue would demonstrate clearly that airports are flush with cash. Unlike the highway trust fund, the aviation trust fund is running a huge surplus. And airports cannot identify a single project threatened by a lack of resources. A higher airport tax is simply a solution in search of a problem.

“Air travelers are already doing their part, paying billions in airport taxes each year. There are real and significant infrastructure needs in this country. Those should be the committee’s focus, rather than taking even more money out of the pockets of passengers.”

In addition, Charlie Leocha of Travelers United, an organization representing American travelers, spoke out against a passenger facility charge increase:

“Consumers are already paying enough, yet localities are not paying their fair share. Passengers are paying the entire cost of running the airports through these federal taxes plus surcharges on everything from parking to airport transportation and at retail operations. Plus, much of the debt financing is paid by PFCs, not the local taxpayers. It only makes sense that the municipalities should provide some funding for the biggest economic engine in their region.”

An increase in the PFC is without question a tax increase on the American people, and that’s why Grover Norquist of Americans for Tax Reform has spoken out against the idea:

“With so much cash on hand and record levels of airport revenue there is simply no case to be made that our publicly controlled airports are desperate for infrastructure funds. Taxes already make up over 20 percent of the cost of an average domestic flight, our lawmakers shouldn’t be adding to this burden by hiking the PFC.”

The Global Business Travel Association’s Shane Downey also urged Congress to ground the airport tax hike, noting that travel in general, especially business travel, is greatly impacted by increased taxes and fees.

“Infrastructure and, in particular, airport infrastructure is vital to the business travel industry. However, the need for increased fees to pay for the infrastructure has been hotly contested. With business travelers taking to the skies on over 144 million trips a year, an increase in the PFC will have a drastic impact. If business travel decreases, the overall economy will suffer. GBTA research shows that for every 1 percent loss in business travel spending, the U.S. economy loses 74,000 jobs, $5.5 billion in GDP, $3.3 billion in wages and $1.3 billion in taxes. That’s too big of a risk to take.”

Here are the facts:

• The aviation trust fund has an almost $7 billion surplus.
• CBO projects trust fund resources will soar to 47.7 billion by 2029.
• PFC revenues have more than doubled since 2000, growing at twice the rate of inflation.
• Annual airport revenues have reached a record of nearly $30 billion.
• Airports are sitting on $14.5 billion in cash on hand.
• Over the last decade, airports have also diverted $5.4 billion to fund pet projects away from the airport.

To learn more about the PFC, visit www.StopAirTaxNow.com.