House bill could cut tax breaks for all airlines

Exemption was passed in 2005 when Delta had financial troubles.

A bill first meant to roll back a fuel tax break for Delta Air Lines has now become a tax increase for all airlines.

If approved, the fuel tax increase would bring in about $23 million a year, which would likely be used to make improvements to airports across the state.

Rep. Earl Ehrhart, R-Powder Springs, originally wrote House Bill 175 in such a way that it would have applied only to Delta.

But on Thursday, he told a House Ways & Means subcommittee: “There was a concern this was singling out one airline. That was never the purpose.”

Ehrhart and subcommittee members noted that the tax exemption was passed in 2005 at a time when Delta was in financial trouble. They said it was never meant to be a permanent tax break.

But that’s exactly what Ehrhart and members of the subcommittee voted for in 2012, when lawmakers overwhelmingly approved a major tax break bill that included making the Delta exemption permanent.

Ehrhart’s love for the tax break cooled earlier this year, however, when he voiced displeasure with Delta CEO Richard Anderson after hearing that Anderson said lawmakers should not be “chicken” about raising the state’s gasoline taxes for transportation. The legislator said one of Delta’s 12 registered lobbyists was threatening co-sponsors of his bill, a charge the airline’s executives deny.

On Thursday, the bill was expanded to eliminate the fuel exemption for all airlines, not just Delta.

House Ways & Means Chairman Jay Powell, R-Camilla, said collecting the fuel sales tax money would provide local communities with matching money to attract federal funding for major airport projects, such as runway expansions. Powell said airport improvements are seen as economic development in most of Georgia and the improvements would make more parts of the state accessible.

While most of the money would be raised at HartsfieldJackson International Airport, subcommittee Chairman Ben Harbin, R-Evans, said it wouldn’t have to be spent in Atlanta, which would make the increase more attractive to rural lawmakers.

Delta officials did not speak at Thursday’s hearing, but earlier this week they called the measure a “significant tax increase” for the company.

Rep. Allen Peake, R-Macon, a member of the subcommittee, said, “I do have some concerns about the economic impact on one of the state’s largest employers.”

Ehrhart responded: “I would think they would actually benefit from it. I don’t have a significant concern.”

The subcommittee is expected to approve the bill next week.