Pennsylvania state Sen. Dan Laughlin, R-Erie, introduced legislation June 5 that would create a new aviation trust fund, raise aircraft fuel taxes and add aircraft registration fees to support airport projects across the state.
Senate Bill 1365, known as the Pennsylvania AIR Act, was referred to the Senate Transportation Committee the same day. According to bill text filed with the Pennsylvania General Assembly, the proposal would also make changes to the state’s Aviation Restricted Account and fund workforce programs, air service development and emerging aviation technologies.
Under the bill, 0.425% of state sales and use tax collections would be deposited annually into the Aviation Trust Fund. Aviation gasoline taxes would increase to 24 cents per gallon beginning July 1, 2027, and jet fuel taxes would rise to 8 cents per gallon beginning Jan. 1, 2027.
Beginning in 2030, alternative aviation fuels, including electricity and hydrogen used for aircraft propulsion, would be taxed on a jet-fuel gallon equivalent basis. Aircraft registration fees would begin in 2028 and would be set at $25 per seat for noncommercial aircraft, capped at $750, and $50 per seat for commercial aircraft, capped at $2,500.
Other funding sources would include private aviation facility licensing and inspection fees, aviation-related penalties, interest, state aircraft use reimbursements, airport rents, airport fees and proceeds from the sale of state-owned airport property.
“Airports are economic engines for communities across Pennsylvania,” Laughlin said in a statement from his office. “This legislation is about making sure they have the resources needed to grow, compete and serve the public for generations to come.”
State Rep. John Inglis III, D-Allegheny, circulated a June 10 co-sponsorship memo for companion legislation in the House, calling the proposal a bipartisan effort to provide long-term aviation funding.
The bill follows a 2022 Pennsylvania Transportation Advisory Committee report that estimated the state’s aviation system needed about $217.5 million annually to maintain its 121 public-use aviation facilities and complete basic modernization projects. The report identified a funding gap of about $53.5 million and recommended a mixed-source funding plan that included fuel tax increases, an aircraft registration fee averaging $300 per aircraft and portions of existing tax revenue.
SB 1365 seeks to address that gap, although it uses a different structure, including higher aviation fuel tax rates than those proposed in the report, the seat-based aircraft registration fees, new private aviation facility fees and a trust fund supported in part by the 0.425% sales and use tax allocation.
While this does not sound too onerous at face value, it seems to create a whole new level of bureaucracy, state employment, and interference that Pennsylvania is famous for. How much of that income will actually go to aviation infrastructure when the state will create new funding streams, regulation, and oversight that necessitates a larger state government workforce? Will it actually add benefit to the users? Sounds much like the states ABC system.