U.S. Private-Jet Fuel Taxes Rise 65% in Senate Accord

By John Hughes

April 25 (Bloomberg) -- U.S. business-jet owners would pay 65 percent more
in fuel taxes to finance federal air-traffic control upgrades, under an
agreement among Senate leaders.

The levy would increase to 36 cents a gallon from 21.8 cents now, under the
accord announced in a statement today in Washington by Senator Jay
Rockefeller, a West Virginia Democrat. Airline passenger fees and taxes
wouldn't rise, he said.

The agreement between Rockefeller, chairman of the Senate aviation
subcommittee, and Montana Democrat Max Baucus, who runs the Senate Finance
Committee, ends a seven-month standoff that stalled an aviation-funding
bill. Today's deal clears the way for an April 28 vote to bring the bill to
the full Senate.

Rockefeller wanted to double fuel taxes for corporate aircraft while cutting
fees for airlines, which he said paid disproportionately for aviation
services. Instead, he settled for the smaller boost, so that small-jet
owners will pay 5 percent of federal aviation costs, up from 3 percent.

``This agreement is a good down payment toward ending the growing inequities
that exist between airline passengers and corporate jet users,'' Rockefeller
said in the statement.

The House approved its version of the funding legislation, which would
finance the Federal Aviation Administration through 2011, on Sept. 20.

The House bill, which would boost business jet-fuel taxes to 35.9 cents a
gallon, and the final Senate proposal would need to be reconciled in a
conference committee before being sent to President George W. Bush for his
signature.

Bush Veto Threat

The Bush administration threatened in June to veto the House legislation,
saying it doesn't meet needs such as creating user fees to pass on even
higher charges to business-jet operators. U.S. airlines backed the Bush
position on user fees.

Today's Senate agreement means that the user fees, which business-jet owners
viewed as more burdensome than higher fuel taxes, are in neither version of
the legislation.

The National Business Aviation Association, a Washington- based trade group
for business-jet operators, said its members support funding the FAA and
improving air-traffic control technology ``with a reasonable fuel tax.''

``We applaud the continuing work Congress has done on this very important
issue,'' Ed Bolen, the association's chief executive officer, said in a
statement.

Airlines' View

An airline trade group called the tax increase for business-jet users ``a
step in the right direction.''

``It still falls short of the costs they impose on the system,'' James May,
president of the Washington-based Air Transport Association, said in an
e-mailed statement. ``We will remain engaged with these committees as the
remainder of the package is developed.''

While losing the battle for user fees, airlines gained other benefits in the
Senate legislation, which doesn't increase their costs. The House version
raises airline passenger ticket charges for airport improvements to as much
as $7 from $4.50, which would generate $1.1 billion a year.

The Senate bill also creates a new $400 million FAA account dedicated to
upgrading the air-traffic control system. Raising the excise tax on fuel
used by private jet owners will bring in an additional $240 million a year.
************************************************** **************************************************

As always with tax laws, "divide and conquer" is the order of the day. The
strategy is to get each segment of aviation pointing at each other, so that
we all forget the fact that there is NO reason to give the Feds a nickel
more.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"