Tax hike on Newark Airport jet fuel nearly cleared for takeoff
A hike in taxes on airline fuel could land on Gov. Phil Murphy’s desk in a week, after the latest incarnation of the plan to help fund a PATH extension to Newark Liberty International Airport was endorsed Monday by the Assembly Appropriations Committee.
The proposal was amended Monday to exclude flights from Atlantic City and Trenton-Mercer airports, which had been added under a previous set of changes. The latest version of A4392/S2892 exempts airports with fewer than 20,000 scheduled commercial flights a year.
It would apply to all flights out of Newark – where United Airlines accounts for two-thirds of passengers. United vice president of state and local government affairs Daniel Lynch says the airline’s fuel tax bill would increase more than $20 million a year.
“We are a significant taxpayer in the state of New Jersey,” Lynch said. “We pay over $400 million a year in taxes, rates and charges and fees, both to the Port Authority and to the state of New Jersey. We think that’s a significant amount.”
Lynch said United’s fuel costs are already $2.3 billion higher this year than last year, though he acknowledged that fuel costs have fallen over the past month.
“It’s just not sustainable,” Lynch said. “It will curb growth. It will stop job creation at Newark Airport. It will drive all that growth to LaGuardia and JFK. I don’t think that’s a smart economic policy for this state.”
The tax would be raised by applying it to all jet fuel, rather than just what is burned during takeoff and landing.
United handles over 28 million passengers a year at Newark, so if that cost were passed along to customers, it would seemingly amount to less than $1 a ticket.
The Port Authority of New York and New Jersey’s PATH project is favored by Essex County lawmakers, who want a PATH stop in Newark’s South Ward. Airport workers also want it to improve their commute, said Arthur Phillips, research analyst for UNITE HERE Local 100, which represents airport food concession workers.
“Our members spend far too much time getting to and from work. They spend too much money,” Phillips said.
Sean Williams, vice president of state and local government affairs at Airlines for America, said a tax on airplane fuel can’t legally be used on the PATH project because it’s not part of the airport.
“Using these revenues for PATH train extension is a clear-cut violation of federal law, and it comes with some substantial risks associated with it with regard to sanctions from the federal government,” he said.
“The federal government has had no problem in the past sanctioning the Port Authority for violating that rule, and there have been fines associated with that,” Williams said. “I think it’s something that should not be taken lightly.”