The Virginia General Assembly is considering a bill that would take $5 million a year “off the top” of the Commonwealth Airport Fund to use as incentives for airline service at “non-hub and small hub” airports.
House Bill 1603, assigned to a House finance subcommittee Jan. 12, seeks to amend a portion of the Code of Virginia relating to grants made by the Department of Aviation. It would divert some of the sales and use tax money currently going into the Transportation Trust Fund, where it is used for airport improvements, into a new Commonwealth Port Fund. Some of the money in that fund would be used during the next three years for a “Low-Cost Airline Incentive Program.”
A somewhat Byzantine formula for allocating the money is included in the bill but, basically, it would give no less than $50,000 and no more than $2 million to any “air carrier airport sponsor” in any one year.
The bill is described by its creator, William H. Fralin Jr., as a way to encourage mass transit. His expectation is that airlines can be lured into serving small communities through subsidies or other incentives, described by one opponent as “bribes.”
The bill, as currently published, would divert money for this purpose “until July 1, 2008.” It does not make clear whether that time could be extended by later legislative action.