Sending Office: Honorable Mark Sanford
I wanted to reach out to you about a letter to Speaker Ryan that I am leading regarding opposition to raising the Passenger Facility Charge (PFC) in any upcoming appropriations bill. As you may know, the PFC is an airport tax hidden in a traveler’s airfare.
Last year, authorizing language was placed in the Senate THUD appropriations bill allowing for a drastic increase in this fee. This increase will ultimately hurt the consumer by raising cost of traveling to, from and within the U.S. by an estimated 1.9%
for domestic and 0.6% for international travelers.
There is also little proof that this increase is needed by the airports. In FY2017 alone, U.S. commercial aviation taxes and fees exceeded $24 billion, or more than $66 million per day. Federal taxes and fees already comprise approximately 21% or $64 of
a typical $300 domestic round-trip ticket. In addition, airports are experiencing record high revenues (nearly $29 billion in 2016), record high unrestricted cash levels (over $14 billion in 2016) and record high PFC collections ($3.3 billion in CY2017).
The letter simply opposes the inclusion of any PFC increase any upcoming appropriations bill.
We will be closing the letter on Jan. 17 and would love to have your support.
Please let me know if I can provide any additional information, and text of the letter is below.
As Congress continues its work to complete the Fiscal Year 2018 Appropriations process, we are writing you to reaffirm our strong opposition to a provision in the Senate Transportation, Housing and Urban Development, and Related agencies (THUD) bill that
would increase taxes on airline passengers by nearly doubling the passenger facility charge (PFC) cap.
Specifically, Section 119L of S. 1655 would increase the maximum passenger facility charge that may be collected from a passenger on certain flights from $4.50 to $8.50. This provision is not only bad for airline passengers, both leisure and business, it
will also significantly increase the federal deficit because none of the additional funds raised from passengers will ever make it to the federal Treasury. In fact, on November 27, the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT)
determined that the provision would, if enacted, reduce federal tax receipts by $944 million over the next ten years – thereby increasing the federal deficit by the same amount. This arbitrary and unneeded tax increase is bad policy for not only our constituents
who are airline passengers but also the entire tax paying public.
In FY2017 alone, U.S. commercial aviation taxes and fees exceeded $24 billion, or more than $66 million per day. Federal taxes and fees already comprise approximately 21% or $63 of a typical $300 domestic round-trip ticket. In addition, airports are experiencing
record high revenues (nearly $29 billion in 2016), record high unrestricted cash levels (over $14 billion in 2016) and record high PFC collections ($3.3 billion in CY2017). Given the overwhelmingly positive financial position and significant amount of unused
funding already available to our nation’s airports, and the billions of dollars in airport improvements already done and underway, a secretive tax increase is simply unnecessary and wrong.
This provision will also hurt our economy both from a domestic and international perspective. Earlier this month, the International Air Transportation Association (IATA) released an economic briefing indicating that increasing the PFC on domestic and international
passengers by $4 for the first segment (within the U.S.) of each one way trip would increase the cost of traveling to, from and within the U.S. by 1.9% for domestic and 0.6% for international travelers.
IATA outlines that this decreased demand for air transport will negatively impact the airline and airport operators serving the U.S. market. The impact will also ripple out through the broader economy along the air transport supply chain and tourism sector.
In all, the combined damage to the U.S. economy flowing from the decrease in passenger traffic is estimated to reduce the industry’s overall annual contribution to GDP by $5.1 billion and about 52,000 jobs.
Your opposition to including this arbitrary tax increase in any 2018 Appropriations bill considered in the House is greatly appreciated. We look forward to continuing to work with you on developing innovative ways to meet our nation’s infrastructure needs
without raising taxes and harming a vital sector of our economy.
e-Dear Colleague version 2.0