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September 24, 2013

Michigan airport funding eyed

TRAVERSE CITY — The director of Cherry Capital Airport is working with northern Michigan legislators to reform the way state revenues are collected and allocated for aviation projects.

Kevin Klein, executive director of Cherry Capital, was recently appointed director of the Michigan Association of Airport Executives. Klein said he’s now working with Reps. Wayne Schmidt, R-Traverse City, and Phil Potvin, R-Cadillac, to advocate for legislation that would remove a 3-cent excise tax for commercial airlines and which would exempt aviation fuel in Michigan from the 6 percent general sales tax.

House bills 4571 and 4572, sponsored by Schmidt, would then create a 4 percent ad valorem tax on on the wholesale price of aviation fuel. The revenue generated from the new tax would be dedicated entirely to the Michigan Aeronautic Fund, meaning airports would have a reliable, long-term revenue stream that could be used to help secure federal grant funding.

“Right now we are generating about $6 million, and this will generate about $35 million,” Klein said.

Klein said Potvin has introduced another bill that would insure that schools and local units of government are not shorted as a result in the change of the tax structure. The legislation would redirect state General Fund dollars to the School Aid Fund and revenue sharing.

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