The Red Sox & the Yankees; American East – Aviation – Division

As I sit typing this blog on the day of the Red Sox season opener against the Baltimore Orioles—Eastern Region HQ (me) Vs AOPA HQ (colleagues)—I am reminded that competition is indeed a celebrated characteristic of American culture. By the very nature of our nation’s humble beginnings competition is, like in sports, ever present in business and in life.

New York’s aviation industry is credited with an annual economic impact of $4.5 Billion in state and local revenue and the source of 500,000 direct and indirect jobs (or 4.7% of the state’s workforce).  While these numbers are certainly eye catching, as an athlete and competitor, success is less about what is achieved and more about the relationship between ones achievements relative to one’s potential for an interval of time.

There’s an old adage that reigns particularly so for aviation industries in the Northeast where competition between states is compounded by our relatively small geography. That is, “If you are not taking steps to move forward, you are moving backwards.”  In other words, to simply maintain the status quo one must change and adapt.

I recently participated in a phone interview with an NBC news affiliate out of Buffalo regarding the New York Aviation Jobs Act (AJA – A.3677-B/S.273-B)—which is the industry’s sound bite to create jobs and boost revenues through the targeted elimination of a significant financial barrier to the purchase and operation of aircraft in New York.  A respected journalist in his region, I was unable to determine if he harbors personal angst with the legislation or if he is in fact an exceptionally talented devil’s advocate.  I would prefer the latter and of course offer him the benefit of any doubt.    One of his arguments opposing the AJA was a question of Northeastern state’s efforts to repeal targeted sales & use taxes as “a race to the bottom.”  If by bottom he meant the elimination of the associated tax, then I would issue an emphatic “YES!”  His angle (as I understood it) offers the cushy scenario in which the elimination of these exemptions would place states on an even keel and ultimately generate a guaranteed revenue stream for a state.  Within this conjured world I would again reply with an emphatic “YES”, followed by an even more emphatic BUT that world doesn’t exist..”  As some might view this parallel universe a stroke of genius in which big corporations continue to pay government large sums of money with no loopholes to line their deep pockets with additional dollar-signs, reality knows not all things are created equal.  The list of examples is endless so I’ll spare you my own interpretation and point to the first and most obvious of them; differing tax rates.

For fear it isn’t obvious, I’ll jump back to the blog’s title for a moment as I infused a historic Major League Baseball rivalry as a metaphor for competition among the states.  While my intent is always crystal clear in my mind, I am aware that the rhythmic ramble with which I preach results in an uncanny knack for skewing even the most focused minds.  I thank my Nanna for that talent! ;)

Not long after accepting this position I realized politics boils down to a matter of perception.  In New York, our plight has less to do with the economic importance of General Aviation as much as it does its economic potential.  With the annual economic figures as I previously tossed out, no one really disputes GA’s importance to New York—but—with any tax legislation there is a financial value attributed to revenue generated from a given proposal.  We tend to think of this value in terms of a “price tag”, and the value associated with the AJA is $13.4 Million.  Legislators must then weigh the value of these presumed guaranteed revenues against the economic potential, or opportunity for increased (or decreased) revenues.  In other words, an exemption like this one is really an investment and so becomes a case of getting legislators to “see the forest through the trees.”  AND while we have plenty of anecdotal evidence to support our case, the dynamics from upstate to downstate make for a unique challenge gaining support from the Assembly.

Basis for Change: Since 2002, NY has lost approximately 700 income generating aircraft.  Courtesy of our friends at the National Business Aviation Association (NBAA), we know the average business aircraft generates $1 Million in annual economic activity and 5 jobs.  So where did they all go? I should first point out for those of us who grew up in parts of New England outside of Massachusetts; the Boston Red Sox is considered New England’s baseball team; hence the fan-handle Red Sox Nation.  With the advance of targeted sales tax exemptions throughout Red Sox Nation, many of New York’s aircraft popped-out to airports just over the border.  Why you ask?  It is the generally accepted notion that corporations (as well as individuals) are in business to make money and so the competition of a free market society presents opportunity in the form of reduced expenses.  GA is by its very nature a mobile industry.  Given the simple reality that owner/operators can save hundreds of thousands of dollars (or more) basing their aircraft in neighboring states, they did just that.

The net result:If you build it, he will come” – Field of Dreams

Red Sox Nation realized that by creating a competitive financial atmosphere for aircraft, we would not only maintain those aircraft currently based here but pick up additional aircraft, each of which needs to bed-down (hangar/tie-down), purchase fuel, and requires various other services all of which—and most importantly—employs people.  These people earn salaries, their income is taxed and then whatever remains is spent on homes, groceries, entertainment, and so forth.  Over any interval of time, the potential for revenue generating transactions increases exponentially, which is all made possible (in this scenario) because of the economic engines that are state airport systems.

Comparison of Success:  Without breaking into the weeds, New York’s GA industry generates its $4.5billion & 500,000 jobs from its system of 130 public use airports.  Comparatively, the seat of Red Sox nation (Massachusetts) is credited with $4.3billion and 400,000 jobs from only 40 public use airports.  Now while the direct comparison of these states treads on apples and oranges, I am required to remind you that not all aircraft were created equal.  Instead let us consider another viewpoint.  According to the FAA, New York is currently host to 7,455 (based) aircraft at its airports.  Massachusetts, with one-third as many airports, is host to 3,664 aircraft.  The simple law of averages indicates the Red Sox’s have a batting average almost twice that (based on raw numbers alone) of its longtime rival.  So again, it is fair to conclude there is a correlation between the number of based aircraft and the associated success of a state’s aviation industry.

The Yankees are and continue to be a historically successful team, however, (as some fans like to gripe about an unlimited payroll) two-times as many airports offer considerably more economic potential than the neighboring system.  As such, my Red Sox continue to dominate the American East—Aviation—Division.  As we say in sports, there’s always tomorrow so fear not my Yankee friends and colleagues.  The Aviation Jobs Act is alive and well despite the final budget resolution released today (Monday, March 31st).  As the AJA awaits consideration in the Assembly Ways & Means Committee, your industry representatives (AOPA, NBAA, & NYAMA) are hard at work educating lawmakers and changing perceptions.  The opportunity to turn the tide is  ever only one-swing away and no fans know this better than those tuned into the fourth game of the 2004 ALCS between none other than the Red Sox and the Yankees.

Keep GA’s voice strong and join or renew today: http://www.aopa.org/Membership.aspx

Airport Management Associations

Today’s world seems to require a specialized Association for everything!  Automobile owners have the American Automobile Association, (AAA); Gun owners have the National Rifle Association (NRA), and of course those of us who own or operate aircraft have the Aircraft Owners & Pilots Association (AOPA)—all of which I belong to.  There are many hundreds, possibly thousands, of similar Associations out there spanning most all industries—I wonder what the actual count is up to?

Naturally some associations, like those I mentioned, are more widely known than others.  Here are a few I previously never heard of:  National Limousine Association (NLA), National Parking Association (NPA), and slightly closer to home—Airport Ground Transportation Association (AGTA).  Knowing there are many other associations out there serving a distinct purpose for their member-base, I often wonder if there are any within GA I am not yet aware of that maybe I ought to be.

As I move around the region I talk to many members and businesses and am always trying to gauge their individual level of engagement with General Aviation.  Frequently I meet people who use aircraft for business and pleasure but maybe by the nature of their work or different life focus remain unaware of even local aviation associations—be they local pilot or airport associations.  Comprised of local businesses and residents (money and votes to a politician ;) ) these associations exude great influence over local and state legislation.

One particular type of association that many pilots remain unaware of is their State’s Airport Management Association.  Now it’s true not every state has one but if yours does, you may consider joining even if you don’t work in airport management.  Where I live, we have the Massachusetts Airport Management Association (MAMA).  Initially I joined because it made sense for me as a Regional Manager to be involved in statewide airport matters, but the more I worked with MAMA and others like it, I realized how they benefit me as a pilot—protecting the very system that allows me to enjoy the privilege of flight.  Airport management associations such as those in Mass (MAMA), New York (NYAMA), New Hampshire (GSAMA), and Pennsylvania (ACP), are often the largest state-based aviation lobbying groups.  These groups generally maintain close relationships with the respective division of the State DOT and this direct link serves advocates like you and me as an excellent communication medium with State officials and industry leaders.

Now like any association, there are usually annual member dues—these monies usually serve to cover quarterly member and Board of Director meetings.  Some Associations also hold annual conferences to bring the membership together with other state leaders and related entities for education and networking.  The most recent of which I participated in was MAMA’s Annual Conference held at Gillette Stadium—surely a place worth visiting even if you’re not a Patriots fan!  In addition to these annual Conferences, Massachusetts and New York host annual Capital Days in which the members gather to represent their respective airports and talk with State leaders about the benefits of our industry while highlighting the immense economic impact airports have on a state’s economy—nothing grabs the unsuspecting legislator like rattling off “Did you know” facts such as: Massachusetts’ 40 public use airports support 400,000+ jobs, and generate more than $4 Billion in annual economic activity.  Of course, these are the kinds of fun facts every pilot and aviation advocate should know about their own state!

So with this information in mind, considering joining if your state has one, of course if it doesn’t—Happy New Year—now is a great time to start one!