user fees: Clark County Airport board takes a positive step

From Ben Zion Hershberg in this morning's C-J, an update on a painfully lengthy effort to deal with the financial woes at the Clark County Airport...

After months of wrangling, Clark County Airport's board voted unanimously to institute a fuel surcharge to raise revenues. (The airport initially [and strongly] resisted such steps, wanting taxpayer financing instead.) The board also received the final draft of a consultant's report. (I had blogged on that earlier.)

In the middle of the article, Hershberg provided a summary of the report. Detailing the private financing aspects...

The Clark County airport is among the busiest in the state, with nearly 70,000 landings and takeoffs a year, consultant Ken Ross told the board. But it generates the least revenue from operations of all the airports in the study, getting only about $89,000 a year from contracts with businesses operating there, Ross said...All but one of the comparable airports has a fuel charge, Ross said, with the charge generally ranging from 5 cents to 15 cents a gallon.

Back to the top of the article...

Responding to pressure from county officials to make the Clark County Airport self-supporting, the board that oversees the airport unanimously approved a charge last night on aviation fuel. "It will do us a lot of good," board member Dan Gregory said. Without additional revenue, he said the airport will run out of cash to pay its bills next year.

So, if this is a good idea and all of the other airports do it, why did this take "pressure" from county officials?

Eric Taylor, an owner of Aircraft Specialists, which provides business jets for charter at the airport, said he is disappointed with the board's action. "It will make us less competitive," Taylor said...A 10-cents-a-gallon fuel charge would mean absorbing or passing on to his customers thousands of additional dollars of expense a year, Taylor said.

"The county needs to belly up to the bar" and help fund the airport, Taylor said.

Mr. Taylor is doing quite well with E200-level economic analysis, but seems to have a self-serving (and unjust) view of the role of government.

--The tax (as a proxy for a user fee) will make the producers less competitive. When a subsidy is removed or reduced, then a producer will be less competitive. Correct.

--The producers will pass on the tax to its customers. Assuming an inelastic demand (few close substitutes)-- as seems likely here-- quantity demanded will be little affected and most of the tax's burden will fall on consumers. Correct.

--Who should finance the airport? Is there really any serious argument that those who use the facility (companies and the wealthy who fly and use planes) should pay something-- before we even think about banging on the door and reaching into the wallet of the general taxpayer? Beyond that, why should we ever take money from the common man to support such things? Or why should producers of services at an airport receive tax breaks or subsidies not available to other producers?