2022/03 – A9224/Green Tax

Screen Shot 2019-10-21 at 5.48.17 PMDK Rambol.

In 2019, a Green Air Travel Tax would have yielded $856.3 million. 

 
“A9224 establishes a ‘green air travel tax’ for all passengers who fly to or from an airport located in a city having a population of one million or more persons (JFK, LGA); a ‘green fund’ to provide grants to airline communities disproportionally impacted; and an ‘airline community resiliency board’ to determine how to spend the monies.1
 

Green Air Travel Tax (GATT)

“A tax of $8 for an economy boarding pass, $15 for business, and $20 for first class … shall be paid upon the purchase of a boarding pass by any person for an aircraft which is flying to, or from, an airport located within any city having a population of one million or more persons. (JFK, LGA)”

Business travel comprises 12% of total.2  Presume an even split between business class and first class, and the proposed GATT generates $9.14 per traveler.

In 2019, JFK and LaGuardia airports together served 93.7 million travelers.3 4

93.7 million * $9.14 = $856.3 million.

Overall air travel is projected to recover to 2019 levels by 2024.5

Green Fund (GF)

“There is hereby established in the joint custody of the state comptroller and the commissioner of taxation and finance a fund to be known as the ‘green fund.’  Moneys in the fund shall be kept separate from any other moneys in their custody.”

“Moneys of the green fund shall be made available to the ‘airline community resiliency board’ (ACRB) for the purpose of providing grants to non-profits, qualified organizations and local governments in communities disproportionally impacted by the health and quality of life issues associated with airline communities.

Airline Community Resiliency Board (ACRB)

The ACRB shall (include) one member from each of the following airport communities: John F. Kennedy; LaGuardia, Buffalo Niagara, Albany, Greater Rochester, Syracuse Hancock, Long Island MacArthur, Westchester, Stewart, Elmira/Corning, Plattsburgh.”

Models

European Union “eco taxes”

A 2019 ICF study6 detailed Europe’s efforts to a) manage the near-term effects of “flight shame”7 and b) reconcile the industry’s long-term growth with the goal of carbon-neutrality.8 Eco taxes comprise 3% to 14% of EU air fares. 

The French government called for an éco-contribution of €1.5 for economy class within the EU and up to €18 for business class outside the EU.  This tax was to have raised €160 million ($200) annually with the proceeds ring-fenced to fund alternative transportation projects.9

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Transport for London “green bond”

In 2015, Transport for London (TfL) issued a The £400 million (US $600 million) bond offering.  TfL’s goals were to diversify its investor base and promote its pipeline of green assets.10

Proceeds were deposited to TfL’s general cash pool and tracked to demonstrate that they were allocated to eligible projects: rail and station upgrades, purchase of hybrid buses and expansion of its already extensive network of bikeways.

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Suggested Improvements

– Clarify that GATT methodology and mechanisms for collections are consistent with that used by the Federal Aviation Administration (FAA) to assess “passenger facility charges” (PFC).11

– Reconcile revenue streams and environmental impact with ACRB composition. Only flights out of JFK and LGA would be taxed, yet 9 of 20 ACRB members represent communities outside NYC.

– Determine whether ACRB members represent communities that are in fact “disproportionately impacted.” MacArthur Airport combines with Ronkonkoma LIRR to form a model transit-oriented development.12 Westchester Airport borders Rye Brook—one of wealthiest communities in NY.13

– Align A9224 with the Climate Leadership and Community Protection Act with a 35-40% set aside for environmental justice communities (EJC) and expand the size of the Environment and Climate Change Projects Bond Measure.

– Use GATT proceeds to augment congestion pricing and fund improvements to Metro North, LIRR and the NYC subway—including its extension to LaGuardia.

– Mandate that GATT proceeds are ring-fenced to sustainable projects. This will enable air carriers to market taxed flights as “carbon-offset.” United, Delta, Jet Blue unilaterally offset flights before the pandemic.14 15 16 And numerous carriers maintain programs that enable passengers to do so.17

British-AIrways-offset-LeapfrogBritish Airways

– Include EJCs within the Port District as GF beneficiaries—George Washington, Bayonne, Goethals Bridges, Outerbridge Crossing; Holland-Lincoln Tunnels, PA-GWB Bus Terminals, Penn Station and Red Hook Container Terminal.18 

– Similarly, ring-fencing GATT proceeds to projects which enhance sustainability and resilience, facilitates their “green bonding.” This guarantees that projects are funded, accelerates implementation and ensures demand from ESG investors.

climate bond 2019 highlightsClimate Bonds Initiative

– If GATT funds are allocated statewide, task the regional MPOs with decision-making. They’re experienced prioritizing regional transport needs and allocating funds for sustainable projects.19 

NYSAMPO

NYSAMPO

1 “Green Air Travel Tax, Green Fund, Airport Community Resiliency Board,” “A09224,” NYS Assembly, 2/9/22, https://tinyurl.com/3vpfkty6

2 “Business travel accounts for 12% of all air travel, but 75% of carriers’ revenue,” “How Much Airline Revenue Comes From Business Travelers?” Investopedia, viewed 3/6/22, https://tinyurl.com/4pd8a35d

3 “2019 Air Traffic Report,” PANYNJ, p.3, https://tinyurl.com/2p894nrb

4 Ibid, p. 9

PA AIR TRAVEL 2019

5 “Air Passenger Numbers to Recover in 2024,” International Air Transport Association (IATA), 3/1/22, https://tinyurl.com/5349y8nv

6 “Aviation taxes and their role in managing aviation’s carbon footprint”, ICF, 2019, https://tinyurl.com/y4ekc2tn

7 “Flight-Shaming Taxes: Climate Policy or Opportunism?”, Forbes, 10/29/19, https://tinyurl.com/sh2vg5j

8 “Flight shame: Airlines are under rising pressure to cut their carbon emissions.”, Los Angeles Times, 8/28/19, https://tinyurl.com/y2rjej7t

9 “France plans ‘eco-tax’ for air fares,” BBC, 7/9/19, https://tinyurl.com/sesh3xs

10 “Green Bond,” Complete George, 02/20, https://tinyurl.com/2p83cr4z

11 “Passenger Facility Charge (PFC) Program—Airports”, Federal Aviation Administration, https://tinyurl.com/skym9v7

12 “Suffolk County Transit Oriented Developments,” Connect Long Island, https://tinyurl.com/ycykt9f2

13 “Household Income—Rye Brook, NY,” Statistical Atlas, viewed 3/6/22, https://tinyurl.com/yckj37bx

14 “United wants Gen Z customers. Gen Z wants discounts and carbon offsets,” Washington Post, 9/10/19, https://tinyurl.com/48pvc24y

15 “Delta Air Lines CEO announces the carrier will go ‘fully carbon neutral’ next month,” CNBC, 2/14/20, https://tinyurl.com/yx4odvy4

16 “JetBlue plans to go completely carbon neutral on all U.S. flights,” Washington Post, 1/8/20, https://tinyurl.com/u8arynb

17 “Guide to airline carbon offset programmes,” Business Traveler, 4/3/22, https://tinyurl.com/28awhb9t

18 “For those living in close proximity to major transportation hubs like highways, ports, rail yards or warehouses, tailpipe (or ‘downstream’) emissions yield an outsized risk to community health.,” “Zeroing in on Healthy Air,” American Lung Association, 3/22, P. 5, https://tinyurl.com/dp22hvdj

19 Map of New York State MPOs, New York State Association of MPOs, viewed 3/6/22, https://tinyurl.com/2ujy787z

Neile Weissman, 2022