NBAA, Other Groups Partner With Lawmakers to Fight Excessive Taxes, Protect Airports
August 12, 2010
New York State is one of the top destinations for business aircraft in the country, but many businesses choose not to base their aircraft at New York airports because of the state’s especially high taxes.
While neighboring states such as Massachusetts and Connecticut have tax policies designed to attract general aviation (GA) aircraft, New York imposes a sales and use tax on all GA airplanes that encourages basing them outside the state’s borders.
“We have an aviation sector in this state that is incredibly productive,” said state Assemblywoman Donna Lupardo (D), “but continues to perform well short of its potential because of a competitive disadvantage with neighboring states, due in large measure to our tax treatment of GA aircraft.”
Lupardo recognized that when companies operating in New York decide to base their flight departments in Massachusetts or Connecticut, New York loses jobs – specifically, fuel suppliers, equipment and parts manufacturers, maintenance facilities, flight schools and FBOs. That’s why Lupardo decided earlier this year to support state Senator William Stachowski (D) and Assemblyman Robin Schimminger (D) in forming the New York Legislative Aviation Caucus.
“Airplanes are mobile assets,” said Lupardo. “Especially in tough economic times, when businesses are particularly sensitive to cost pressures, operators will base them where it’s least prohibitive. Right now that means fewer jobs in New York.”
Stachowski and Schimminger partnered with the New York Aviation Management Association (NYAMA) to rally fellow legislators behind the idea of establishing the caucus to advance aviation in the state.
NYAMA members encouraged their representatives in Albany to join the New York Legislative Aviation Caucus during an annual Advocacy Day in March, meeting with lawmakers and following up with letters and phone calls.
“We let the legislators who formed the caucus know we’d support their goals and would serve as a resource,” said Joel Russell, manager of Albany International Airport (ALB) and President of NYAMA. “We’re reaching out to their colleagues and providing research and information to back their proposals.”
NBAA’s Northeast Regional Representative, Dean Saucier, encouraged NYAMA and other business aviation associations in New York to support the formation of a state-level caucus after witnessing the effectiveness of such a group in Massachusetts. Over the last five years, the Massachusetts caucus and the industry have worked together to keep that state’s tax exemption in order to continue attracting business aircraft.
“NBAA always supports advocacy efforts by local groups and encourages grassroots campaigns like this one in New York,” said Saucier.
Saucier participated in the NYAMA Advocacy Day, sharing NBAA resources on the economic benefits of business aviation with lawmakers and facilitating grassroots collaboration with like-minded groups, including the Eastern Region Helicopter Council (ERHC), Long Island Business Aviation Association (LIBAA), Westchester Aviation Association (WAA), Aircraft
Owners and Pilots Association (AOPA) and the Business Aviation Management Group (BAMG).
The caucus now has a bipartisan group of 56 members – a quarter of the legislature – in both the state Senate and Assembly, representing all areas of New York.
“Every type of aviation stakeholder in New York supported this caucus,” said Russell, “from GA reliever airports to commercial airlines to maintenance and engineering companies to company flight departments. The aviation community is a broad spectrum, but it’s all jobs.”
Lupardo now leads the caucus and is continuing to partner with NYAMA in recruiting her colleagues to join. The caucus’s main goal is to pass the New York Aviation Jobs Act, repealing the sales and use tax on GA aircraft and replacing $15 million per year in bond measure airport funding that expired last year.
“It’s our job to expose fellow legislators to stories about how we’re losing business to other states,” said Lupardo. “Aviation contributes over $35 billion to economic activity in New York. That’s nearly 350,000 jobs and $2.8 billion in tax revenue, but it could be higher.”
Russell is optimistic that together, the caucus and the aviation community will be successful in drawing more business aircraft to New York through lower taxes and better airports, if they’re persistent.
“It’s always difficult to promote tax relief in a year when the budget is getting slashed,” said Russell, “but we were encouraged by the enthusiasm with which the legislators formed the caucus. The state’s own reports show that reducing taxes on airplanes drives commerce to the state and in the medium term, increases the state’s overall tax revenue. It’s a win-win.”