Senate Committee Approves Yee's Bill
Political Desk
June 30, 2005
Senate Committee Approves Yee's Bill to End Assault on Local Tax Revenue
AB 451 Guarantees Local Governments Receive Fair Share of Jet Fuel Sales Tax Dollars
Despite heavy lobbying by the airline industry and the city of Oakland against Assembly Bill (AB) 451, the State Senate Committee on Revenue and Taxation approved the legislation, which could return millions of dollars in jet fuel sales tax revenue to airport host communities across the state.
The bill by Speaker pro Tem Leland Yee (D-San Francisco/Daly City), would close a loophole in the law that is currently being exploited by United Airlines and the city of Oakland, siphoning millions of dollars in jet fuel sales tax revenue from airport communities including San Francisco and San Mateo County (SFO), Ontario and San Bernardino County (ONT), Los Angeles (LAX), Sacramento (SMF), San Diego (SAN), and San Jose (SJC), all into Oakland.
AB 451's approval came only after Speaker pro Tem Yee had to accept amendments from the Committee's Chair Mike Machado (D-Linden) to delay the bill's implementation for two years.
"This has not been an easy fight, taking on the billion dollar interests of the airline industry and powerful political influence of Oakland," said Speaker pro Tem Yee. "Airport communities deserve this money now, but part of the political process and building consensus is compromise. With the passage of AB 451, San Mateo County, San Francisco, and others will finally receive their fair share in 2008."
The debate stems back to 1998 when the State Legislature passed a bill designed to ensure that communities hosting airports receive the benefit of the sales tax on jet fuel dispensed by airlines, provided that the given airline has more than one place of business in the state. This policy was developed to ensure that counties that bear the burden of jet fuel pollution, traffic, and noise would also reap the benefits of sales tax revenue.
However, United Airlines formed an Oakland-based subsidiary to establish a single-point-of-sale, thus depriving $3 million to San Mateo and San Francisco Counties (SFO), $1.5 million to Los Angeles (LAX), and significant revenue to Ontario and San Bernardino County (ONT), among other airport communities. In exchange for doing business only in Oakland, the city gave United Airlines a 65 percent kickback of the sales tax revenue generated throughout the state.
"In order to continue providing critical services for children and families, our local governments need these dollars now," said Speaker pro Tem Yee. "In my district, we are losing enough revenue to pay for 100 police officers to patrol our streets, two health clinics for disadvantage neighborhoods, or 210 permanently affordable housing units for low income seniors."
"Both San Francisco and San Mateo Counties also must mitigate issues of noise, pollution, and significant traffic from SFO airport, and thus deserve the jet fuel sales tax revenue," said Speaker pro Tem Yee. "Although Oakland deserves the revenue generated out of their airport, they don't deserve the dollars generated in our backyard and throughout California."
AB 451 now goes to the Senate Appropriations Committee before a vote by the entire Senate. Last year, Governor Arnold Schwarzenegger (R-Los Angeles) vetoed similar legislation calling for further study. The Assembly Revenue and Taxation Committee did precisely that by holding a hearing in southern California to examine the issue.
"This year, I am hopeful that the Governor will sign AB 451 and return these needed dollars to our communities," said Speaker pro Tem Yee. "If this bill is not signed into law, local governments may face an even greater assault on their budgets when other airlines establish similar deals."
AB 451 Guarantees Local Governments Receive Fair Share of Jet Fuel Sales Tax Dollars
Despite heavy lobbying by the airline industry and the city of Oakland against Assembly Bill (AB) 451, the State Senate Committee on Revenue and Taxation approved the legislation, which could return millions of dollars in jet fuel sales tax revenue to airport host communities across the state.
The bill by Speaker pro Tem Leland Yee (D-San Francisco/Daly City), would close a loophole in the law that is currently being exploited by United Airlines and the city of Oakland, siphoning millions of dollars in jet fuel sales tax revenue from airport communities including San Francisco and San Mateo County (SFO), Ontario and San Bernardino County (ONT), Los Angeles (LAX), Sacramento (SMF), San Diego (SAN), and San Jose (SJC), all into Oakland.
AB 451's approval came only after Speaker pro Tem Yee had to accept amendments from the Committee's Chair Mike Machado (D-Linden) to delay the bill's implementation for two years.
"This has not been an easy fight, taking on the billion dollar interests of the airline industry and powerful political influence of Oakland," said Speaker pro Tem Yee. "Airport communities deserve this money now, but part of the political process and building consensus is compromise. With the passage of AB 451, San Mateo County, San Francisco, and others will finally receive their fair share in 2008."
The debate stems back to 1998 when the State Legislature passed a bill designed to ensure that communities hosting airports receive the benefit of the sales tax on jet fuel dispensed by airlines, provided that the given airline has more than one place of business in the state. This policy was developed to ensure that counties that bear the burden of jet fuel pollution, traffic, and noise would also reap the benefits of sales tax revenue.
However, United Airlines formed an Oakland-based subsidiary to establish a single-point-of-sale, thus depriving $3 million to San Mateo and San Francisco Counties (SFO), $1.5 million to Los Angeles (LAX), and significant revenue to Ontario and San Bernardino County (ONT), among other airport communities. In exchange for doing business only in Oakland, the city gave United Airlines a 65 percent kickback of the sales tax revenue generated throughout the state.
"In order to continue providing critical services for children and families, our local governments need these dollars now," said Speaker pro Tem Yee. "In my district, we are losing enough revenue to pay for 100 police officers to patrol our streets, two health clinics for disadvantage neighborhoods, or 210 permanently affordable housing units for low income seniors."
"Both San Francisco and San Mateo Counties also must mitigate issues of noise, pollution, and significant traffic from SFO airport, and thus deserve the jet fuel sales tax revenue," said Speaker pro Tem Yee. "Although Oakland deserves the revenue generated out of their airport, they don't deserve the dollars generated in our backyard and throughout California."
AB 451 now goes to the Senate Appropriations Committee before a vote by the entire Senate. Last year, Governor Arnold Schwarzenegger (R-Los Angeles) vetoed similar legislation calling for further study. The Assembly Revenue and Taxation Committee did precisely that by holding a hearing in southern California to examine the issue.
"This year, I am hopeful that the Governor will sign AB 451 and return these needed dollars to our communities," said Speaker pro Tem Yee. "If this bill is not signed into law, local governments may face an even greater assault on their budgets when other airlines establish similar deals."
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