Off we go, into the wild blue yonder
Faced with a daunting range of problems, from crumbling highways to mediocre public school test scores, state lawmakers plan to spring into action with a high priority: eliminating the sales tax on airplanes, airplane parts and servicing.
Proponents of the $12.5 million giveaway have cited the usual reason for the largess toward a handful of Pennsylvanians: job creation.
Well, not so much. The state's Independent Fiscal Office, which was created in 2010 to assess the impact of spending and revenue proposals on the state budget, conducted a study of the aviation tax exemption. Noting that other states bordering Pennsylvania have enacted partial aviation tax exemptions, the IFO found that those tax breaks had no impact on aviation-sector employment in those states.
The IFO also found that aircraft manufacturing employment increased in the state between 2005-2011, largely because of a Sikorsky Global Helicopters operation and a Boeing-Bell helicopter plant that produces military aircraft. Aviation retail sales employment has declined over that period, but there weren't many people buying new aircraft during the Great Recession.
One of the IFO's tasks is to determine what it would take to make a particular tax cut or spending increase "revenue neutral" regarding the budget. If found that about 4,700 new jobs would be needed to replace revenue lost from the proposed tax exemption.
If the bill passes, be prepared to send $1,320 to Harrisburg if you buy a $22,000 car. But if you get yourself a $22 million Citation X business jet, have a nice flight, and keep your tray table and campaign contributions in an upright position.