No Surprise: A4A Opposes TSA Tax Hike

One of the ‘voices’ often heard from the aviation lobby is that of Nicholas Calio. He is President and CEO of A4A, the airline lobby more fully known as ‘Airlines for America’, with the slogan ‘we connect the world’. Wikipedia indicates Mr. Calio is from Ohio, born in 1953, with a law degree from Case Western Reserve University. He served as an advisor to both Presidents Bush,, and in fact was a key person when TSA was formed immediately after the 9/11 attack. Also in his past history is that he formed a law/lobby firm in DC. He came to A4A in January 2011 after serving as the Vice-President for Global Government Affairs at Citigroup.

Mr. Calio’s frequent comments include accurately pointing out last fall that an excessive amount of airline passenger fees are routinely directed to general aviation airports with no direct support of commercial aviation. He consistently advocates for reforming FAA’s administration of the AIP funds, along the lines that funds collected in commercial aviation should be spent on commercial aviation.

Here is the latest A4A release by Mr. Calio, followed by rebuttal comments by aiREFORM…

WASHINGTON, D.C. – Airlines for America (A4A) today supported calls for efficiency improvements within the TSA, while strongly urging House Republicans not to punish passengers, shippers and airlines by doubling the TSA passenger security tax in their budget proposal.

Air travel today is already taxed at a federal rate higher than those for alcohol and tobacco, products that are taxed to discourage their use. It’s illogical that the House Republican budget would single out the airline industry for a tax hike that Congress has rejected on five previous occasions – it’s a lose-lose for passengers, airlines and the economy,” said A4A President and CEO Nicholas E. Calio. “As partners with the TSA, we are fully supportive of risk-based measures and agree greater efficiencies can be achieved while improving safety and the customer experience. A4A commends Chairman Ryan and his Republican colleagues for recognizing that TSA’s cost efficiency goals can be met while maintaining the highest passenger and baggage screening standards – which is a key component in ensuring aviation security around the world.

Calio noted that TSA’s budget has increased by 18 percent since 2007, yet passenger traffic has decreased over that time. Language included in the House Republican budget proposal notes this as well, but despite that, still suggests increasing TSA taxes from $2.50 to $5 per flight, costing airline passengers more than $730 million annually in addition to the $2.3 billion already paid today. A4A believes full implementation of programs that take a risk-based approach to security, such as TSA PreCheck for passengers and Known Crewmember for pilots and flight attendants will enhance security and screening efficiency and are a more appropriate way to help drive down TSA operating costs.

– copied 3/21/13, at airlines.org

When Mr. Calio speaks about aviation tax rates, he is speaking first about FAA and second about TSA. There is no disputing that FAA’s budget and expenses have grown considerably, and there is plenty of room for cost-savings. But, in rebuttal to Mr. Calio’s statement, there is a significant difference between the tax burdens on consumption of commercial air miles, and on consumption of alcohol/tobacco products. That is, states are generally not allowed to impose local excise taxes on commercial aviation, while the Federal government seems to deeply respect that local and state taxes on alcohol and tobacco are valid and even encouraged as a means of local revenue generation. Consequently, a commercial airline ticket has nowhere near the total tax cost as do a bottle of gin or a carton of cigarettes. Furthermore, a little online research shows the federal tax on cigarettes is $1.01/pack which, compared with the prices on display at gas stations around here, suggests a steep 25% tax rate. This is much higher than the level of excise taxes paid in aviation, and it would be nice if Mr. Calio would be more careful with his rhetoric. In fact, the jet fuel tax here in Oregon is one-cent per gallon (!), and there is a fight brewing to stop it being raised to three-cents per gallon.

Calio makes an important point at the second highlighted comment: aviation is NOT growing, it is contracting. And it has been contracting for roughly a decade. This alone reasonably suggests room for FAA (and TSA) to make adjustments, as needed when revenues are flat or even declining.

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The one most important point is not yet being discussed, but will be soon. There is no doubt that we cannot and should not continue to encourage people to fly on a whim, to rack up tens of thousands of air miles each year. The environmental costs are becoming too great. Not just the incessant streams of air carriers near major hub airports, but also the air pollution, and most dangerously, the climate change. Change is at our door, and great leaders are needed to help mankind adapt to – and prepare for – these changes…

Gov. Tom McCall, an Oregon environmental legend

Oregon has a reputation throughout the world for a history of environmental action and concern. Much of this reputation was earned when Tom McCall was our Governor: land-use planning, the bottle bill, the fight to end clearcuts, our open beach law. So, with this proud history and reputation, and with the clear need to dampen excessive consumption of fossil fuels, why is Oregon taxing only one penny per gallon for jet fuel?