Port of Camas-Washougal joins effort to address aviation fuel funds

Officials want state to prevent diversion of money meant for public airports

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The Port of Camas-Washougal, which owns Grove Field airport near Camas (above), has joined an effort to challenge Washington state's alleged misappropriation of aviation fuel sales tax funds. (Post-Record file photo)

The Port of Camas-Washougal is set to join legal efforts to prevent what Port officials say is the state’s misuse of an aviation fuel tax meant to fund aviation-related programs.

The Port’s chief executive officer, David Ripp, told Port commissioners during their Jan. 4 meeting, that “federal law and regulation requires that all the fuel tax that is paid by aviation needs to go back to aviation so that the money can be used for programs as grants … but the state’s not doing that.”

Instead, Ripp said, the money is going into the state’s general fund.

On Jan. 4, the Port of Camas-Washougal Board of Commissioners approved an interlocal agreement with the Chelan Douglas Regional Port Authority in Wenatchee, Washington, which Ripp said is “leading the effort … (to) negotiate with the state about doing what it should be doing.”

The Port of Camas-Washougal will contribute $500 to the pre-litigation inquiry and help pay attorneys to review the Federal Aviation Association’s legal requirements for the state of Washington, Ripp said, adding that the Port “could benefit from that in the future” since it owns and operates the public Grove Field airport located about 3 miles north of downtown Camas.

Ripp told Port officials Jan. 4, that the pre-litigation phase will “evaluate and consider a range of options to prevent the diversion of aviation fuel tax for non-aeronautical purposes.”

Ripp added that signing the agreement does not put the local Port “in the crosshairs,” but will allow the agency to contribute to the legal review effort.

Port of Camas-Washougal Commissioner John Spencer told The Post-Record he doesn’t think the legal efforts will surprise anybody involved in the aviation industry.

“(This) has been going on for years,” Spencer said of the state’s alleged misuse of the aviation fuel tax funds. “We — the public airports — have pushed at various points to say, ‘Hey, look at this,’ or ‘Hey, think about this,’ or, ‘Hey, why don’t you want to do the right thing?’ Nobody in Olympia has listened so far, so we’re ratcheting it up a notch and saying, ‘You really need to look at this.’”

Spencer added that the majority of Washington’s public airport owners and operators have joined the legal effort.

“Twenty or 30 airports are signed on,” Spencer said. “The idea is to lay it out in legal language that the (state’s) attorney general will have to pay attention to, and see if that moves the ball. We don’t want to get in a legal battle in the state. That’s expensive.”

Spencer said the best-case scenario is that state officials consider the issue and comply with the federal laws, which he said prohibit using the funds for anything other than airport-related capital or operating costs.

“I think we’re one of two states that are not in compliance,” Spencer said. “When you look at the state budget, it’s a drop in the bucket, but for the aviation community, it’s huge. Admittedly, $20 million will build a road somewhere. The state would rather use it for that, I guess. They just want to use the money elsewhere.”

According to the interlocal agreement the Port agreed to enter into Jan. 4, an FAA grant assurance states that “all revenues generated by the airport and any local taxes on aviation fuel … will be expended by it for the capital or operating costs of the airport; the local airport system; or other facilities which are owned or operated by the owner or operator of the airport, and which are directly and substantially related to the actual air transportation of passengers or property; or for noise mitigation purposes on or off the airport.”

Washington state authorizes cities and counties to collect an excise tax at the rate of 18 cents per gallon on aviation fuel sales at FAA-grant assurance airports, with the state’s Department of Revenue collecting a hazardous substance tax (HST) and petroleum products tax (PPT) on the sale of aviation fuel at FAA grant assurance airports.

Spencer said anything the local Port can do to help improve Grove Field would be appreciated by local Port officials.

“Our airport is a good airport, but it’s never been developed anywhere close to what it could be,” Spencer said. “There’s a lot of economic missed opportunities there.”

According to the interlocal agreement the Port entered into: “Washington state possesses no data on the actual amount of local sales/use tax, HST, and PPT collected specifically on aviation fuel. The state concedes that obtaining this data would be ‘expensive and administratively burdensome,’ and the revenue is estimated to be in the tens of millions of dollars.’

The agreement adds that “past efforts at bringing the state into compliance have been unsuccessful, and effective regulatory remedies are lacking.”

Spencer said the potential impact to ports around the state could be “significant,” but is currently “unknown because the money’s not there and hasn’t been allocated.”

Spencer pointed to other states’ disbursement of similar funds.

“In other states, if you take FAA money, their grants are 90 percent grants,” Spencer said. “In pretty much every other state in the nation, the state kicks in that last 10 percent so the owner of the airport doesn’t have to shell out lots and lots of money to make airport improvements.”

In Washington, Spencer said, “the state will currently do 5 percent, and (ports are responsible) for the other 5 percent. It’s still a great deal, but if you’re talking about rebuilding a runway for $20 million, it’s still half a million dollars.”