Northey Concerned About Tax Increase

Secretary of Agriculture sends letter to Senator Grassley opposing significant change in fuel on small planes.

Iowa Secretary of Agriculture Bill Northey sent a letter to Iowa Senator Chuck Grassley last week regarding legislation before the Senate Finance Committee that could alter the fuel tax on small planes. Northey expressed concern that changes would have a negative impact on the agriculture industry in Iowa.

"If anyone understands farming and rural Iowa, it's Senator Grassley," Northey said. "I know he is always fighting to protect Iowa's interests against more urban minded members of Congress, and I hope this letter will help him in that effort."

The proposed change, included in the Aviation Investment and Modernization Act of 2007, S. 1300, and establishes a new user fee of twenty-five dollars per flight and more than doubles the current fuel tax for small aircraft from $.21 to $.49 per gallon. The change could significantly impact farmers using small aircraft and local airfields for transportation and for crop dusting.

Full Letter Included

July 12, 2007

The Honorable Charles E. Grassley
United States Senate Finance Committee
219 Dirksen Senate Office Building
Washington, DC 20510-6200

Dear Senator Grassley:

I am writing to express my concern about the proposed increase of the user fee and fuel tax in the Aviation Investment and Modernization Act of 2007, S. 1300. This legislation is intended to authorize funding for the Federal Aviation Administration, yet some of the provisions in the bill would have a negative impact on the agriculture industry in Iowa.
This legislation would establish a new user fee of twenty-five dollars per flight and more than doubles the current fuel tax for small aircraft from $.21 to $.49 per gallon. This suggested increase of cost would have a negative impact on the Iowa's rural communities, including farmers and small business owners. These new costs are suggested as corporate airlines see an elimination of the current fuel tax of $.43 per gallon.

As you know, aviation plays an important role in the production of crops. Farmers use small aircraft and local airfields to support their farming operations, with means for transportation and for crop dusting. An increase in the user fees or in the fuel tax would be an increased cost for Iowa farmers.

Please keep in mind Iowa farmers as you review this legislation and the possible negative impact that the user fee and fuel tax may have on the agriculture community.

Thank you for your consideration.

Sincerely,

Bill Northey
Iowa Secretary of Agriculture

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