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Tennessee airports proposed to get $95M in state funding in upcoming budget

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(The Center Square) – Tennessee’s airports are proposed to get $82.5 million in direct state funding with a projected additional $13 million from the state’s Transportation Equity Fund in Gov. Bill Lee’s budget proposal.

That includes $59.5 million in recurring budget along with a proposed $23 million in one-time funding.

Tennessee Association of Air Carrier Airports President Doug Kreulen told the Senate Transportation and Safety Committee on Wednesday morning that will put the airports at nearly the $95.7 million they had requested for this fiscal year.

“That’s what we’re hoping when we finish the budget process,” Kreulen said to the committee.

Last year, the airports received $83 million in funding.

That funding is up from $37 million it requested in fiscal year 2022 but below the $125 million it expects to request two years ago. That’s because the main mechanism for funding the airports, the aviation fuel tax, has been cut down to $1 million.

The first few iterations of the aviation fuel tax cap mainly benefitted FedEx, the only company at the time that reached the cap when it was first installed after paying $45 million in annual aviation fuel tax.

The cut from a $5 million annual cap per company cost the state $2.6 million while the drop from a $3 million cap to $1 million cost the state $10.6 million annually in taxes.

Overall, Lee’s budget says the cap will help companies avoid paying an estimated $39.6 million in aviation fuel taxes next fiscal year.