A record number of travelers will take to the skies this summer, with legions flocking to Orlando, home to what Americans affectionately refer to as the most magical place on earth: Disney World. Regrettably, though, many travelers may be forced to cancel those plans.
A number of Democrats in Congress are proposing a misguided tax hike that, if approved, would saddle airline passengers with new, burdensome travel costs. But what’s most troubling about the Democratic proposal is that a handful of Republicans think it’s a good idea.
The Democratic plan calls for a dramatic increase in what is known as the Passenger Facility Charge (PFC), a hidden tax on travelers that is intended to pay for renovation projects at airports around the country.
Most Americans have probably never heard of the so-called PFC, now set at about $4.50 per person for each leg of a flight. But if Democrats and a few wayward Republicans get their way, the PFC won’t be so obscure anymore. That’s because the PFC could soon be doubled and, in the process, impose an additional cost of $144 on a family of four for a connecting flight.
It’s remarkable to hear otherwise sensible Republicans like Reps. Buddy Carter of Georgia and Chris Collins of New York publicly justify their decision to join Democrats on this misguided effort to fleece American travelers.
Carter claimed that the tax hike was necessary to ensure that airports are not left behind as they age, even though airports are already sitting atop billions of dollars in untapped construction funding. (More on that last point later.)
And Collins won’t even level with the public about what the PFC actually is, a hidden tax. “Those are user fees,” he said.
But let’s not get caught up in semantics, a longtime refuge of politicians who lack the courage of their convictions. Let’s focus on the substance of this matter. The bottom line is that there is no legitimate rationale for increasing this tax – or, as Collins terms it, user fee.
As I mentioned, airports already have a pot of money to fund modernization projects. And that pot is growing every day, courtesy of, well, taxpayers. Consider this: airports have an uncommitted balance of nearly $7 billion in a so-called aviation trust fund – an amount the Congressional Budget Office has projected will rise to a staggering $47.7 billion by the end of the decade.
The current renovation of Orlando International Airport is proof that the current system isn’t broken and that funds are readily available to cover construction costs. Without any increase to the PFC, the airport is undergoing a $2.8 billion project to add 19 gates, automate screening lanes located in TSA checkpoints, upgrade the baggage-claim system, and improve the overall passenger experience. Officials say the new South Terminal project will attract an additional 11 million passengers. Now that’s a hefty new stream of income for airports.
Investments like Orlando’s have spurred a race to the top as airports across the country compete to create the best facility. In fact, in the last decade alone, over $130 billion of capital projects have been completed, are underway, or have been approved at the nation’s 30 largest airports.
At the end of the day, not only is the tax hike – um, user fee – unnecessary, but it will fall squarely on the backs of Americans who already struggle to afford the cost of a flight, even with fares at historic lows.
Moreover, increasing the PFC will discourage air travel and force families who rely on low-cost flight options to stay home. And given the fact that my father spent nearly 40 years as a lead mechanic for Eastern Airlines, I can safely say this proposal will have a large economic impact, hurting local businesses – including rental-car companies, hotels, and office parks – that benefit directly from airport activity.
If Democrats and their Republican allies get the PFC hike they want, the summer vacation season will look awfully bleak for many travelers, including those hoping to visit the most magical place on earth.
John Colon is the Managing Principal of Sanderling Partners and a former gubernatorial appointment to the Florida Republican State Executive Committee.