Lawmakers brought the elimination of a jet fuel tax in for a landing this Session.
When appropriation chiefs for the House and Senate finalized a state budget, a long-sought repeal of the aviation fuel tax was included. That means when various forms of tax relief go into effect in August, a 4.27-cent levy on every gallon of the commodity will disappear.
That has been a House priority, originally advanced as a standalone bill (HB 1485) by Rep. Fabián Basabe, a Miami Beach Republican. After the House Ways & Means Committee advanced the bill on a 12-5 party-line vote, it ultimately was woven into the lower chamber’s budget proposal with other taxation policy.
Rep. Wyman Duggan, a Jacksonville Republican who chairs the House Ways & Means Committee, said the change in policy could make Florida airports more attractive to airlines of all sizes.
That could be especially important to regional airports like the one in Tallahassee, a place lawmakers know is hard to reach even from within the state without utilizing connecting flights. Duggan suggests that’s partly because some airlines want to avoid ever having to refuel in Florida thanks to the tax.
“If we eliminate that cost of doing business to them, some might think to themselves we will serve Tallahassee or Sarasota or Naples,” Duggan said. “We might fly into there. And that has the benefit of increased air service to communities.”
Hopefully, that means more airlines run routes to Florida airports, which in turn means better service for constituents and potentially a boost for airports in all other revenue streams like licensing and gate fees.
He notes most major airlines refuel in major hubs, so this may not mean Delta jets fuel in Florida instead of their Atlanta hub. But many smaller carriers don’t have hubs and gas up where they can.
Rep. Lawrence McClure, a Dover Republican who chairs the House Budget Committee, said he had his sites on killing the aviation fuel tax for years. As a freshman lawmaker in 2018, he supported the decision then to reduce the excise tax from 4.27 cents a gallon to 2.85 cents. The change then still required pilots and carriers fueling in Florida to pay the full rate, but then request a refund later of 1.42 cents per gallon.
Democrats have largely remained unconvinced of the virtue of grounding the levy.
“It would really hurt revenue for airports, and I was never persuaded to believe that airlines make route decisions based on it,” said Rep. Anna Eskamani, who voted against the repeal in the House Ways & Means Committee. “They are going to provide routes where there is demand.”
She was also disappointed there was also no requirement for savings for airlines to transfer into lower prices for consumers.
“It just feels like a giveaway to airlines who already nickel and dime us,” Eskamani said.
And the repeal certainly comes with a cost. Duggan said the repeal will mean $14 million few dollars go to the State Transportation Trust Fund, and the state’s general revenue fund with take a $2 million hit. The latter part will be offset for the most part in the coming fiscal year with a trust find transfer of $1.5 million to general revenue.
The funds raised through the aviation tax could only be spent on airport infrastructure, but that’s money no longer available. Duggan believes an increase in air traffic will ultimately offset that loss.
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