NYAMA Testifies on Aviation's Impact on State Economy & Jobs

ALBANY, NY (11/16/2011)(readMedia)-- New York's aviation industry representatives warned a panel of state lawmakers this week that the critical lack of infrastructure investment, competition from other states and a sagging state and national economy continues to impact New York jobs, airports and related businesses.

NYAMA urged increased state investment in revenue producing and job creating airport projects, a reallocation of unspent airport development monies and the reform of the state's aviation tax laws.

In testimony presented at a public hearing held by members of the Assembly Transportation Committee, Joel Russell, Past President of the New York Aviation Management Association (NYAMA), expressed concerns regarding the State's adopted Two Year Capital Plan for transportation and the needs of New York's aviation sector. Russell testified that the New York State Department of Transportation (NYSDOT) estimated funding need for airports over the 20 Year period from 2010 to 2030 to be $4.3 billion. "The current Two-Year Capital plan has no new funding for airports," Russell declared. "This investment will be necessary to preserve the system and allow airports to attract passenger, cargo, and general aviation services," he argued.

Infrastructure and security investments in the aviation sector, specifically at public-use airports, helped generate billions of dollars in economic activity in New York State, according to NYSDOT Commissioner Joan McDonald.

According to a State Department of Transportation study, airports are economic engines fueling growth in the communities they serve. The aviation industry contributes over $50 billion in annual economic activity in New York State and almost 400,000 State residents work in aviation or aviation-related industries. The economic benefits of New York State airports are impressive. As a whole, aviation generates $18 billion in payroll and $4.5 billion in state and local tax revenue annually.

"New York State must invest now for effective aviation infrastructure programs or face much higher, perhaps prohibitive, prices later when decay has made the challenges far worse," Russell stated. He suggested that, to keep generating billions of dollars in economic benefits and aviation-related job growth in NY, there needs to be a renewed public and private investment in the state's vital airport system.

NYAMA urged lawmakers to help work to develop a new, reoccurring aviation financial assistance program needed to replace Transportation Bond Act money that ran dry in 2009 and suggested the Committee look at the State's Airport Improvement Program (AIP) fund-used to provide the required state match for the federal AIP program. NYAMA estimated an accumulated and unobligated balance in the state's AIP account at tens of millions of dollars. "NYAMA proposes that these accumulating re-appropriations be released for today's aviation needs by transferring the surplus to the State's AIR '99 program to fund airport capital projects, equipment, navigational aids, and promotional initiatives," Russell said.

To help airports help themselves and the state's economy, Russell urged adoption by the Assembly of the Aviation Jobs Act, legislation aimed at equalizing competition from more lenient tax laws in surrounding states such as Connecticut, Massachusetts, New Jersey and Ohio. This key initiative, which passed the Senate and is sponsored by twenty-eight Assembly Majority members, seeks to reform the sales tax treatment of general aviation in New York.

Data from the NYS Tax Department indicates that a similar exemption enacted in 2004-sales tax relief for the maintenance and repair of general aviation aircraft-has been a tremendous success, resulting in an expansion of aviation maintenance and repair businesses, jobs and tax revenues here in New York.

"We now hope, via the Aviation Jobs Act, to extend that job stimulus effort to include the purchase of aircraft to significantly reduce the competitive disadvantage with other states in attracting sales and basing of aircraft in New York. The savings that can be realized across state borders has drawn businesses and based aircraft away from New York State, along with the associated jobs and related business activity connected with the aircraft. Since 2002, NY has lost almost 700 based aircraft while Connecticut, for example, gained 31 over the same period.

"Many of these jets sit in just one Connecticut airport which has successfully targeted the New York market for its growth over the past few years representing a loss of important, well paying jobs and millions of dollars in tax revenue to New York each year," Russell argued. NYS Department of Transportation estimates that each business jet on average results in 5 direct jobs and $1 million in economic impact for the state in which it is based.

"New York should adopt these strategies to fully realize the potential of New York's airports and aviation industries as drivers of new, high-quality and sustainable jobs, and to attract greater private sector investment," Russell concluded.

NYAMA represents over 120 airports and aviation organizations across New York. Our diverse membership includes small general aviation airports as well as large hub airports and aviation professionals from all walks of life. NYAMA has been the Voice of Aviation in New York for 35 years.