Pennsylvania’s airports are essential to our economy, our communities, and our future. That’s why the Aviation Council of Pennsylvania is proud to champion the AIR Act—a bold, forward-looking investment strategy that secures $120–160 million annually to modernize our aviation infrastructure, expand workforce development, and accelerate innovation across the Commonwealth. With a funding model that uses aviation-generated revenues and a portion of existing state sales tax—without raising general taxes—the AIR Act provides a stable, long-term solution to help Pennsylvania compete nationally, unlock federal dollars, and ensure every airport, from urban hubs to rural fields, has the resources to thrive.
How Is the AIR Act Funded?
A Long-Term, Balanced Aviation Investment Strategy — Without Raising General Taxes
The AIR Act secures $120–160 million annually to modernize Pennsylvania’s aviation infrastructure, workforce, and innovation pipeline. It’s built on aviation user contributions, bondable revenues, and a modest portion of existing sales tax—without increasing general taxes.
Total Annual Funding Target: $120–160 Million
| Source Type | Estimated Amount | Account |
| Aviation & Bonding Revenues | ~$60 million | Aviation Restricted Account – FAA-compliant infrastructure only |
| Non-Aviation Revenues | ~$60–100 million | Aviation Trust Fund – Flexible, state-directed funding stream |
Aviation Restricted Account
FAA-Compliant Revenue for Core Infrastructure (AIP & BIL Eligible)
This account complies with FAA Grant Assurances and supports eligible infrastructure projects under the Airport Improvement Program (AIP) and the Bipartisan Infrastructure Law (BIL) Airport Terminal Program (ATP).
Revenue Sources:
- Jet Fuel Tax (8¢/gallon) — ~$29.2M/year
- AvGas Tax (24¢/gallon) — ~$1M/year
- Electric & Hydrogen Aviation Energy Tax
- Phased in to reach parity with jet fuel by 2040
- Designed to encourage early infrastructure adoption, then equalize contribution
- CPI Indexing on All Fuel Types
- Jet Fuel, AvGas, and Electric/Hydrogen aviation taxes will be indexed to the Consumer Price Index (CPI)
- Protects long-term purchasing power, ensures fair contribution across time
- 50% of ALL aviation fuel tax revenue is turned back to the public-use airport where the fuel was sold
- Multimodal Transportation Fund (MTF) Aviation Share — $27M/year
- Fees, Fines, Interest & Aircraft Registration — ~$2.5M/year
Eligible Uses:
- Aviation Development Program
- Runways, taxiways, safety systems, lighting, navigational aids
- Environmental and planning expenses
- Terminal improvements
- Local/state matching for federal aviation grants
- 10% Dedicated to Aviation Workforce Development
- Expanded Real Estate Tax Reimbursement
- Reimburses public-use airports for local property tax burdens
- Strengthens airport financial health while preserving municipal revenue
❌ Restricted from use on: marketing, speculative land acquisition, non-aeronautical infrastructure, or purely commercial private developments
Aviation Trust Fund
Flexible, State-Led Investment for Aviation Growth and Innovation
Funded by 0.35% of existing state sales tax revenue, the Trust Fund provides $60–100 million annually for projects not eligible under FAA rules—but critical to airport competitiveness and sustainability.
Use of Funds Breakdown:
| Category | Allocation | Description |
| Commercial Service Airports | 25% | Route development, terminal expansion, multimodal connections |
| General Aviation Airports (NPIAS) | 30% | Hangars, access roads, fuel infrastructure, utility extensions |
| Public-Use Non-NPIAS Airports | 10% | Rural and underserved airport support |
| Emerging Aviation Technologies | 15% | Droneports, vertiports, remote towers, and hydrogen/eVTOL pads |
| Hangar Development | 10% | New construction to address statewide hangar demand |
| Aviation Council of PA (AIRtap & Conference) | 1.6% | Training, outreach, zoning support |
| Governor’s Aviation Advisory Committee | 0.4% | Policy coordination and oversight |
| Director’s Discretionary Fund | 8% | Strategic or urgent aviation priorities |
| Administrative Cost Cap | (within each allocation) | No more than 10% of any fund may be used for PennDOT administration/complement costs |
Grant Matching Flexibility: Up to 100% State Support
Previously, state aviation grants required 50–75% local or federal matching. Under the AIR Act:
- The Aviation Trust Fund may now cover 75–100% of project costs
- Matching flexibility will be based on project type, public benefit, and need
- This change enables:
- Rural and underserved airports to pursue infrastructure projects with limited local funds
- Critical state-priority projects to move forward quickly
- Innovative or time-sensitive initiatives (like emerging aviation or green infrastructure) to be fully state-supported when warranted
⚠️ FAA-required match levels (typically 5–10%) will still apply to federally funded projects; the state will now be able to provide more robust match coverage where needed.
Why This Works
For Airports:
- Stabilizes funding for capital improvements and business development
- Provides consistent local match to unlock federal grants
- Offsets local tax burdens and supports airport financial health
- Supports long-term parity across all propulsion types, including electric and hydrogen
For Pennsylvania:
- Drives economic development in a $34B aviation industry employing 226,000+
- Levels the playing field with roads and transit, which already benefit from dedicated funding
- Encourages innovation, green aviation, and system modernization
- Requires no increase in general taxes, relying solely on user-generated and existing revenues
Support ACP’s Government Affairs
Help ACP continue to advance aviation in our commonwealth. Donate today!