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The American business community strongly supports upgrading our nation’s transportation infrastructure. Earlier this year, the U.S. Chamber laid out a four-point plan entitled “Roadmap to Modernizing America’s Infrastructure.”
At the same time, a hallmark of investing in transportation infrastructure is that users of the system pay for its maintenance and improvement. Aviation users should pay for aviation projects and surface transportation users should pay for surface transportation.
This principle is being challenged in New Jersey to the potential detriment of aviation users at Newark Liberty International Airport.
The New Jersey legislature is currently considering S. 2892, a bill that would charge aviation users, in this case airlines, an increase in the state jet fuel tax that would be used to pay for an extension of the Port Authority Trans-Hudson Corporation (PATH) railway from Newark Penn Station to the Newark Liberty International Airport Rail Link Station and beyond. Ultimately, airline passengers will end up paying for a railway.
While this public transportation project has much merit, forcing aviation users to pay for it is not the right path.
The U.S. aviation industry contributes $846 billion to our nation’s Gross Domestic Product and employs nearly 424,000 people. After suffering from the economic downturn from 2007 to 2009, U.S. airlines are finally on sound financial footing. The stability of U.S. airlines has allowed for billions of dollars in new investments in infrastructure, aircraft, and other customer enhancements.
Not only is this proposed tax increase bad economic policy; if enacted, the New Jersey bill would violate federal law and put millions of Airport Improvement Programs funds at risk that would seriously impact continued growth at Newark Liberty International Airport.
The bill could also put at risk the $24 billion in annual economic output for New Jersey that the airport provides, according to a Federal Aviation Administration economic analysis.
S. 2892 is opposed by the New Jersey Chamber of Commerce and many of the state’s business and labor leaders. Modernizing transportation infrastructure is critical to long-term economic growth. But how we make these critical investments is equally as important. New Jersey should make these investments the right way, and not break trust with aviation providers and users.