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Airlines, urban airports oppose fuel tax increase for rural airfield maintenance

HELENA — A legislative bill that would increase the tax airlines, commercial aviators and private pilots pay on aviation fuel in an effort to route more money to rural airfields has attracted spirited opposition from airlines and urban airports.

In its current form, House Bill 661 would increase Montana’s aviation fuel tax from 4 cents to 6.5 cents a gallon and scale back a 2 cent-per-gallon refund currently provided to commercial airlines.

The measure, which passed the House on a 70-28 vote March 30, was heard April 9 in front of the Senate Highways and Transportation Committee. Sponsor Rep. Geraldine Custer, R-Forsyth, called it a way to shore up runways and other infrastructure at airports that communities across the state rely on for fire fighting, air ambulance, and search and rescue services.

“Nobody likes to raise a tax,” she said. “Sometimes you have to.”

Testifying in opposition were representatives from major airlines serving Montana, including Delta, American, Allegiant, United and the industry group Airlines for America, as well as officials with the Bozeman, Helena, Missoula and Great Falls airports. Both groups said raising fuel taxes could discourage national airlines from providing commercial service to Montana.

“Montana is a remote state,” said Brian Sprenger, the director of the Bozeman-Yellowstone International Airport, saying many of the state’s commercial flight routes are underperforming.

“Any increase in cost puts additional pressure and risk on these flights continuing,” he said.

About 41 million gallons of fuel are sold in Montana a year, according to figures provided by Custer. Factoring in provisions that decrease the airline rebate and raise aircraft registration fees by 50 percent, a fiscal analysis estimates the bill would bring in about $1.6 million a year of additional revenue.

Custer and other proponents say Montana’s aviation fuel tax hasn’t been increased since 1999. She provided a list of $146 million in potential projects airfields around the state hope to complete over the next five years, saying federal match funding is available to cover 90 percent of that cost if the state and local governments can pony up the remaining 10 percent — an amount that comes to $2.9 million a year.

Several proponents said they worried that overdue maintenance like refurbishing runways is compromising the ability for rural community airports to provide things like Life Flight-style air ambulance services.

“I don’t want to read in the newspaper or see in the news that an air team wasn’t able to land in rural Montana because of infrastructure needs,” said Richland County Commissioner Shane Gorder.

The bill was initially introduced with a higher fuel tax increase, to 14 cents a gallon, but was amended downward to keep it moving forward in the legislative process. Custer said she is also preparing an amendment to reduce the increase further, to a new rate of five cents a gallon.

“We’re really not getting the money we need with this deal — but whatever it takes to get this out of here,” she said.

Airlines for America has also targeted the bill on social media, purchasing promoted tweets and setting up a website, stopmtairtaxnow.com, that calls the bill “an enormous, unneeded tax hike that makes Montana less competitive.”

That message was echoed by a number of accounts, including the Montana Senate GOP’s official Twitter communications account, which posted nearly identical messaging and similar images.

A promoted tweet by Airlines for America (left) and the Senate GOP communications Twitter (right).

“This bill could decrease airline service and raise airfares,” the Senate GOP Twitter said, “while airports used mostly by the wealthy with private jets reap the benefits.”

Senate Highways and Transportation Chair Sen. Gordy Vance, R-Belgrade, said he plans to have the committee consider amendments and vote on the bill this coming Thursday, April 9.