The Governor released the Executive Budget a full month earlier than usual in an attempt to address the growing deficit in New York State. According to projections, the deficit gap to be addressed in the 2009-2010 Budget has ballooned to $12.5 billion. While deep cuts were made in virtually every sector, aviation faces a whole set of challenges:

• The Budget cuts state funding for airport projects. The state contribution to the Federal Airport Improvement program is cut from $8 million to $4 million and the hard-fought-for language to capture unused portions of AIP for AIR 99 is eliminated.

• There is no language in the proposed budget to continue the sales tax exemption for maintenance and repair of GA aircraft, scheduled to expire December 2009.

• The Governor recycles a proposal to tax the purchase of charter aircraft that the aviation community defeated last session.

• A new GA aircraft "luxury tax" (additional 5% sales tax) on the part of the price of a GA aircraft in excess of $500,000 is proposed.

• These budget proposals will, of course, raise no additional revenues for the state but instead will severely weaken an industry that should be nurtured so as to continue its excellent record of revenue generation and job creation.

It is important that NYAMA members discuss some important points with both State and Federal legislators:

• Airports are economic engines fueling growth in the communities they serve. The aviation industry contributes over $35 billion in annual economic activity in New York State and almost 350,000 state residents work directly or indirectly in aviation.

• More than $2.8 billion in State and local taxes are generated from aviation activities.

• New York Aviation is threatened by a critical lack of infrastructure investment, competition from other states, and a sagging state and national economy.

• Aviation is one industry that is well positioned to help itself and the State’s economy.

• Airports are revenue generators for the state; proposals that add unnecessary financial burdens on the industry will only chase business to neighboring states that are aggressively attracting aircraft basings and aviation business.

• New York Governor David Paterson's Executive Budget for 2009 will eliminate certain aviation tax exemptions, increase taxes on aviation related activity and also negatively affect the Airport Improvement Program.

Please contact your representatives to discuss these items and plan to join us in Albany for Advocacy Day on February 24, 2009!