PILOTS FOR MONTANA AIRPORTS
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1 PILOTS FOR MONTANA AIRPORTS Montana s Community Airports and MDT Aeronautics are in critical need of help and the solution is quite SIMPLE! 1. The Aviation Fuel tax has remained static at $0.04/gal since MDT Aeronautics is a self-funded program dependent on revenue from aviation fuel taxes (60% of total budget) for Aeronautics Operations and Grants to Montana s public use airports % of aircraft registration fees go to the general fund. The 10% going to MDT Aeronautics does not cover the cost of the registration program. 4. MT Aeronautics has run significant deficits despite an annual infusion of $150,000 from Montana Department of Transportation (MDT). 5. Scheduled Passenger Air Carriers (Airlines) received rebates of $362,926 in FY17 and are projected to receive $591,000 in FY19 and $530,000 in FY Critical airport improvement projects are not moving forward due to lack of funds. 7. Construction costs and fuel prices are significantly higher while the aviation fuel tax has remained fixed at $0.04 Construction Costs are significantly higher while Montana s Aviation Fuel Tax has remained fixed Index Chart National Highway Construction Cost Index 1.1 $0.04 Aviation Fuel Tax per Gallon 1 $ Index Index Aviation Fuel Tax per Gallon Source: US DOT Federal Highway Administration $/gal. $0.15 $0.14 $0.13 $0.12 $0.11 $0.10 $0.09 $0.08 $0.07 $0.06 $0.05 Aviation Fuel has increased % while Montana s Aviation Fuel Tax has remained static $/gal. $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $- Aviation Fuel Prices Jet A Av Gas Jet A Av Gas Source: US Energy Information Administration Aviation Tax Aviation Tax $/gal. $0.20 $0.18 $0.16 $0.14 $0.12 $0.10 $0.08 $0.06 $0.04 $0.02 Document available for download at Page 1
2 TABLE OF CONTENTS MONTANA AIRPORTS PAGE 3 HOW THE AVIATION FUEL TAX SUPPORTS MONTANA AIRPORTS PAGE 4 MONTANA S AVIATION FUEL TAX HISTORY & CURRENT STATUS PAGE 5 MONTANA AERONAUTICS DIVISION PAGE 6 AIRLINE REBATE PROGRAM PAGE 7 SOLUTIONS PAGE 8 CONTACT INFORMATION PAGE 9 Page 2
3 MONTANA AIRPORTS There are 123 Public Use Airports in Montana. 64 are eligible to receive Federal Aviation Administration (FAA) matching grant funds for airport improvements. The 90%/10% grants require 10% local matching funds. The remaining 59 airports fund improvements with local (city/county) funds and/or assistance (if available) from MDT Aeronautics grant program. Air Ambulance operators use Montana s numerous public use airports every day. Montana s Community Airports are critical to wildland firefighting activities. Montana's Aviation System is estimated to provide an overall net contribution to the state s economy of nearly $2.8 billion in business sales and approximately 24,000 jobs. Montana Community Airports provide a base of operations for: Air Ambulance Flight Training Utility Inspection Business Travel Military Operations Agricultural Operations Firefighting Operations on State, Federal & Private lands Search & Rescue Operations Executive Transport Tourism & Recreational Travel Law Enforcement Medical Doctors Transportation Page 3
4 HOW THE AVIATION FUEL TAX SUPPORTS MONTANA AIRPORTS FY19 & FY20 Projections for Funding Airport Projects by MDT Aeronautics Aviation Fuel Tax Allocation Scheduled Air Carrier Rebate 1 Pavement Preservation Fund 2 Available for MDT Aeronautics Operations Available for Grant Program $ 0.04/gal 50 % $ 0.02/gal 25 % Projected Grant Requests from Community Airports Funding Shortfall of MDT Aeronautics Grant Program FY19 $ 1,633,880 MDT Aeronautics $ 816,940 $ 147,861 $ 669,079 Grant Program $ 816,940 $ 591,443 $ 225,497 $ 2,500,000 $ 2,274,503 $ 1,683,140 MDT Aeronautics Grant Program $ 841,570 $ 132,547 $ 709,023 1) In 1993, the airlines successfully lobbied to receive a $.02/gal. rebate for all fuel purchased. The rebate is subtracted from the funds available for the grant program. 2) A Pavement Preservation Fund was established to provide funding to Montana s Primary airports (Billings, Great Falls, Helena, Bozeman, Missoula, Kalispell, Butte and Sidney) and is calculated at 25% of the total tax less rebate paid by the airlines. This amount is deducted from the MDT Aeronautics Operations revenues. Both FAA funded and locally funded public use airports rely on MDT Aeronautics for supplemental funding in the form of loans and grants. $ 841,570 $ 530,189 $ 311,381 $ 2,500,000 $ 2,188,619 A typical runway overlay paving project (100 x 5280 ) with a year life span costs approximately $2.6 million. Many local communities, despite qualifying for FAA grant money, are unable to fund the 10% match for major projects like a runway overlay project. For non-federally funded airports the challenge is even greater. As a result, many necessary airport improvement projects at Community Airports are failing to move forward due to lack of available funding. Funding for community airports has not been addressed for 20 YEARS. Project costs are significantly higher and funding has not kept pace. FY20 Page 4
5 MONTANA S AVIATION FUEL TAX HISTORY AND CURRENT STATUS LEGISLATIVE HISTORY $0.01 for operations $0.01 for loans & $0.01 for grants. Scheduled Passenger Air Carriers eligible for $0.02/gal rebate of total paid $0.01 for operations with 25% of the now of $0.02 of MDT Aeronautics operations revenues going to a Pavement Preservation Program for Primary airports Sunset enacted for 1993 program for loan of $0.01 and became $0.01 for Grants. Since 1999 the Aviation Fuel Tax has remained static at $0.04/gal. distributed as follows: $0.04 Aviation Fuel Tax $0.02 for Aeronautics Operations $0.02 for Aeronautics Grant Fund 25% of the $0.02 goes to the Pavement Preservation Fund for Primary Airports with Scheduled Passenger Air Carrier Service Scheduled Passenger Air Carriers $0.02/gal rebate is deducted from Aeronautics Grant Fund 1 1) Grant Fund Airline Rebate Available for Grant after Airline Rebate FY19 $816,940 $591,433 $225,497 FY20 $841,570 $530,189 $311,381 Page 5
6 MONTANA DEPARTMENT OF TRANSPORTATION AERONAUTICS DIVISION Supporting Safety, Education, Airports and Aviation in Montana MDT Aeronautics provides critical funding support for Montana s Public Use Airports The Aeronautics Division of the Montana Department of Transportation provides these vital services for Montana Airport Planning Airport Directory Safety Inspections of Airports Operation of Yellowstone Airport Airport Loan & Grant Program Air Search & Rescue Aviation Education Operation of 16 State Owned Airports Pilot Registration Aircraft Registration In the preceding 5 years, MDT Aeronautics has fallen short $5,221,560 against Grant funding requests. As a result, community airports are shelving projects knowing that funding assistance is not available. MDT Aeronautics FY19 and FY20 Projections Revenue FY19 FY20 Pilot Registration $13,460 $13,460 Airport Inspections $25,350 $25,350 Motor Fuel Tax $65,281 $66,696 Aviation Fuel Tax $1,633,880 $1,683,140 Aircraft Registration $51,030 $51,030 Indirect Costs Recovery $38,035 $44,173 Hangar Leases $20,967 $21,659 MDT to supplement revenue 1 $150,000 $150,000 Resale/Charts/Clinics/Tax Transfer/Misc. $30,527 $36,497 $2,028,530 $2,092,005 Expenses Personnel Services $682,508 $783,031 Airline Refund $591,443 $530,189 Pavement Preservation $147,861 $132,547 Airport Grants $266,479 $300,000 Search & Rescue $21,025 $32,835 Required Maintenance $110,000 Workshops $10,099 $45,750 State Owned Airport Expense $30,174 $30,760 Airport Improvements $49,995 $32,333 State Aviation System Plan $15,000 $19,167 Airport Inspections $ 3,450 $ 3,266 Operating Expenses (rent/utilities/etc.) $164,538 $164,838 Board/Newsltr/Directory/S&R/Inspection/Misc. $44,789 $44,043 $2,029,909 $2,228,459 Revenue less Expenses ($1,379) ($136,454) 1) MDT has been providing $150,000/year to MDT Aeronautics from a non-restricted highway fund. These funds may not be available in the future for MDT Aeronautics. Page 6 Unfunded Grant Projects FY15-19 GRANT Requested Available Funded Amount Amount (Unfunded) FY15 $1,057,125 $425,000 ($632,125) FY16 $1,902,374 $325,000 ($1,577,374) FY17 $1,403,641 $260,000 ($1,143,641) FY18 $1,607,919 $232,500 ($1,375,419) FY19 $768,001 $275,000 ($493,001) Funds Not Available ($5,221,560)
7 AIRLINE REBATE PROGRAM Passenger Air Carrier (Airlines) Rebate of $.02/gal In 1993, the lobby for scheduled airlines successfully lobbied the legislature to rebate the airlines $.02 of the $.04/gal fuel tax. The Airlines Position: 1) They only use the Primary airports and should not have to subsidize general aviation airports. 2) They already pay numerous fees at the Primary airports. 3) Airlines will have to raise ticket costs. 4) Airlines will not fuel in Montana. 5) Airlines will pull out of Montana if not rebated the $ Response: 1) All taxpayers, individuals and corporations alike pay taxes for services we do not directly use. Allowing the scheduled airlines a rebate is inherently unfair and discriminatory against general aviation. 2) The type fees (e.g., landing, gate, etc.) imposed by scheduled airline airports are for the services and infrastructure of those individual airports and for the privilege of using those airports. These type fees are normal at airports across the country and have nothing to do with aviation fuel taxes. 3) A $ increase in tax would add about $ to the price of a ticket between Billings and Denver, or Bozeman and Salt Lake City. 4) It is not economical for airlines to haul unnecessary fuel. 5) The majority of routes out of Montana feed hubs and have little competition. Ticket prices are typically much higher on a per mile basis vs more competitive routes and logic would suggest reasonably profitable passenger CRJ 200, burning 325 gals/hr, 1 1/2 hour flight Billings to SLC, $0.10/gal. = $48.75 per flight or $0.975/passenger Page 7
8 SOLUTIONS Montana Aviation Infrastructure and Education Investment Act (Currently a placeholder as LC1526) 1) Sunset the Scheduled Passenger Air Carrier rebate of $.02 per gallon. 2) Assign 70% of the aircraft registration fees to MDT Aeronautics operations. Currently, 90% of the aircraft registration fees go to the general fund. 3) Sunset the Pavement Preservation Fund. 4) Establish an Aviation Education Grant Fund 5) Raise the aviation fuel tax $0.10 per gallon for a total $0.14 tax per gallon distributed as follows: a. $0.080 Aeronautics Grant Fund b. $0.045 Aviation Education Grant Fund 1 (to be established) c. $0.015 MDT Aeronautics operations. 1. The Education Grant Fund would be established and function like the MDT Aeronautics Grant fund with the Aeronautics Board having authority over where and what the funds are used for. Emphasis on scholarships, equipment, instructors and programs but not administrative employees. New funding as a result of this this bill Sunset Airline Rebates $ 530,189 Aircraft Registration Fees $ 357,210 Sunset Pavement Preservation Fund $ 132,547 Raise Aviation Fuel Tax by $0.10/gal. $ 4,207,850 Distribution of new funds & aviation fuel tax Grant Fund 1) Sunset Airline Rebates $ 530,189 2) Aircraft Registration Fees $ 357,210 3) Aviation Fuel Tax by $0.14 $ 3,366,280 $ 1,893,533 $ 631,178 1 Total $ 3,896,469 $ 1,893,533 $ 988,388 FY20 budget without this bill $ 300,000 $ 719,542 Net Increase $ 3,596,469 $ 1,893,533 $ 268, Includes sunseting the Pavement Preservation Fund Aviation Aviation Education Fund Montana Aeronautics Funding at this level would allow the MDT Grant Fund to cover a significant portion of the required 10% local match for FAA Airport Improvement Projects, similar to other states. Provided to community airports, these funds can be leveraged 9 to 1 in the FAA Airport Improvement Program. $3,596,469 In MT Aeronautics grant funds can become up to $35 million in airport improvements for Montana Community Airports and provide grant funds for those airports not in the FAA AIP program. Page 8 Rev 10.0
9 PILOTS FOR MONTANA AIRPORTS CONTACT INFORMATION This document is available for download at Pilots for Montana Airports is a grass roots group of pilots from across the state who organized to solve the funding crisis at our community airports with the MDT Aeronautics Grant Program. Adequately funding this program to leverage nine Federal matching dollars with every one local dollar spent is a direct route to insure the viability of Montana s airports. We need your support this legislative session. Contact your local state legislators and ask them to support Senate Bill LC1526. Contact any of these Pilots for Montana Airports volunteers to see how you can help secure the future of Montana airports and Montana Aeronautics. Doug Phair doug@ramshot.com Pete Smith mpaprez@gmail.com Scott Newpower scnewps@gmail.com Terry Spath terryspath@yahoo.com John McKenna jmckenna@theraf.org Carmine Mowbray clarity@cyberport.net Jerry Cain sgr@linctel.net Walt McNutt walt@midrivers.com Page 9
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