Bulk of Michigan Aviation Fuel Taxes Now Dedicated to Aviation Projects

August 16, 2012

Michigan’s aviation fuel taxes, which could total as much as $10 million a year, will now be reserved for aviation projects in the state through Sept. 30, 2013, the result of legislation signed Aug. 15 by Gov. Rick Snyder during a ceremony at the state capitol.

Funds from those taxes had previously been allocated to the state’s general budget, with no assurance that the money would be used for aviation projects. The legislation, HB 4025, was sponsored by Michigan Rep. Dave Agema (R-Grandville) and will take effect immediately, dedicating 4 percent of the existing 6-percent sales tax on both aviation gasoline and jet fuel to the state Aeronautics Fund, which is used for repair and improvement of Michigan airports.

When used to leverage 90 percent of FAA Airport Improvement Program grants, the total funding for Michigan airports could be close to $100 million. A 2008 study by the Michigan Bureau of Aeronautics identified some $1.3 billion in needed work on aviation infrastructure in the state through 2013.

“We’ve been working on this for years,” said Roger Salo, executive director of the Michigan Business Aviation Association (MBAA). “It’s been a team effort that included the Michigan Association of Airport Executives, NBAA and several other groups interested in preserving and improving Michigan airports.”

In working for passage of HB 4025, MBAA Directors Cheryl Bush, John Hatfield and Bill Gehman appeared last year before the Michigan House Transportation Committee to testify on the issues facing business aviation in the state, telling legislators that Michigan airports needed permanent, stable funding for the good of aviation commerce in the state.

“It’s about jobs, really,” said NBAA Regional Representative Bob Quinn. “As everyone knows, Michigan is one of the states hit hardest by the crushing recession that started in 2008, and jobs are still top of mind for every legislator. Having close to $100 million in funding for Michigan airport improvements and construction, 90 percent of it from federal sources, will support a lot of jobs.”

Michigan has more than 18,000 active pilots and 223 airports, but only nine of those airports have airline service. The remainder can only be reached by general aviation.