Another View -- Patrick Abrami: Reviving private aviation in NH, without raising taxesBy PATRICK ABRAMI
November 07. 2017 12:59AM
Earlier this year, the House Ways and Means Committee took up a bill designed to revive the private aviation industry in New Hampshire by eliminating our state’s extremely high registration fees.
The current system of registration fees is very complex, especially for the first 10 years that a plane is registered in our state, based on mileage rates and weight. The owner of a new large plane based here could pay a fee upward of $300,000 for the first year alone. We heard testimony from representatives with interests at the airports in Nashua and Portsmouth who have hangar space but no new customers because of this fee structure.
We also heard testimony from New Hampshire’s airports. Most of them are small, and eliminating these registration fees entirely, as House Bill 124 would do, would also eliminate the funding source for $250,000 in annual assistance that these airports count on. We formed a subcommittee, which I chaired, but were unable to come up with a solution before the end of the session.
“We’re running out of runway,” I said at the time, and all of the constituencies agreed to our retaining the bill to work on it this fall.
Our subcommittee met five times over the past few months, hearing from the state Department of Transportation’s Bureau of Aeronautics, small plane owners, large plane owners, small airports, large airports, airport base operators, the commercial airports, and other interested parties. After meeting with members of the Finance Committee, it was clear no money would be coming from the general fund to help lower the fees. New Hampshire raises approximately $1 million per year in registration fees, and another $250,000 in fuel taxes to fund DOT Aeronautics operations and help our airports. The challenge to the committee and the constituencies was to make changes in fee and tax rates while being revenue neutral. This was a classic zero-sum game.
All of the constituencies made proposals. If the revenue wasn’t enough, we went back to the drawing board. Then the compromises from the different constituencies began. The committee heard what everyone was saying and crafted a grand compromise. What made the compromise somewhat easy was that our Jet A and aviation gasoline taxes were some of the lowest in the country, but our registration fees were some of the highest. So we propose bringing both back to the middle.
The registration formula we’re recommending would be changed to 100 percent weight based. The three types of aviation fuel taxes would each be raised in a modest manner, but our rates would still be much less than most states, specifically Massachusetts. We would raise the same $1,250,000 as current law, $430,000 in registration fees and $820,000 in fuel taxes. The subcommittee voted unanimously for this compromise, and the full Ways and Means Committee supported it by a vote of 22-1.
We hope these changes will be enough to convince a 42-plane timeshare company based in Portsmouth to stay in New Hampshire. Without this change, they would have to pay $6,280,000 in registration fees over 10 years as they modernized their fleet. If they moved to Massachusetts, the registration fees over 10 years would be just $132,000.
Massachusetts came after the larger plane market big time by getting rid of its sales tax on planes, and only charging up to $300 to register a plane per year. But the Bay State’s Achilles’ heel is that its fuel taxes and overall fuel costs are much higher than New Hampshire. The whole fuel tax and overall cost-per-gallon discussion is complex, but the compromise we’re proposing would make New Hampshire competitive again.
We are hopeful that if HB 124 as amended becomes law, there would be resurgence in private aviation in New Hampshire.
Rep. Patrick Abrami, R-Stratham, is vice chairman of the House Ways and Means Committee.