NOTE: THIS LETTER PRECEDED OUR "AIRPORTS DAY ON THE HILL" 2/27/18
Dear Members of the 110th General Assembly
Tennessee’s system of airports, both commercial air carrier and general aviation are crucial parts of our statewide transportation assets. We depend upon them to assure that we are competitive in attracting new business and industry, for emergency preparedness, law enforcement, national, state and local security, medical emergencies, just-in-time deliveries, wildlife and land management, catastrophic event response and so much more.
Tennessee’s Transportation Equity Fund was established by the 94th General Assembly in 1986 (TCA 9-4-207). The sales tax on aviation fuels was then lowered from 6% to 4.5% and dedicated exclusively to build, develop and maintain our statewide system of airports. Mandated, strict control of petroleum products assures the utmost integrity in collections and accountability. Airports funding from both federal and state levels are derived in large measure from fuel taxes.
This “User-based” funding system is fair to all aviation fuel
s consumers and all users benefit from them. The general fund for the State of Tennessee is not affected by this method of funding allowing airports to be more self sufficient. Large and small users alike pay the same 4.5% sales tax rate. In 2015, driven by fuel prices that had been extremely high, the General Assembly opted to cap the tax obligation of high volume users. Fuel prices fell to extremely low levels immediately thereafter, thus the TEF has suffered considerably. Tennessee’s airports projects have begun to suffer from lack of sufficient funding.
The absence of a comprehensive Statewide Airports System Plan for the past 17 years makes it difficult to accurately determine what our financial needs for airports development, maintenance and improvements should be. A Statewide Airports Pavements Analysis done in 2015 indicated that current TEF funding for pavements alone will be insufficient near term just to maintain the current conditions of pavements and does not account for any further economic development of airports across the state.
The 2015 Legislative Aviation Task Force proposed an Aeronautics Economic Development Fund that was established in 2016 (TCA 4-3-2313). It should be noted that this special fund cannot be used for maintaining, updating and improving airports. It is not the same fund as the TEF and is not funded by aviation fuels tax collections.
To allow Tennessee to remain competitive in aviation transportation and to contribute to economic development for the state, continued investment in our airport system is absolutely critical. The TEF is a historically sound mechanism to ensure that all airports, a vital part of our transportation infrastructure, are funded to the fullest extent possible. Two years ago, the Legislative Aviation Task Force cautioned against compromising the TEF further.
Tennessee’s airports implore you to refrain from compromising the Transportation Equity Fund further. We are ready, willing and able to join with you in exploring fair and equitable funding solutions for the years ahead.
Tennessee Aviation Association
Chad Gehrke, President