Jet fuel bill a must to benefit County
San Mateo County Times, 8/27/04
Editorial
San Mateo and San Francisco counties have been “legally” robbed of between $2.4 million and $3 million in sales tax revenues from jet fuel for the past two years. But thanks to last minute legislation introduced by Assemblyman Leland Yee, D-San Francisco, that theft should soon end.
The thievery dates back six years to a bill designed to channel tax revenues from jet fuel sales back to communities hosting airports. It was meant to be a real boon for counties such as Los Angeles, Orange, Santa Clara and of course San Mateo and San Francisco. But with County and city economies in dire need of more money and airlines struggling for their very survival in post-9/11 America, crafty lawyers went to work to find a loophole in 1998’s Assembly Bill 66.
By 2002, United Airlines and the city of Oakland found that loophole in the fine print, allowing United to establish a subsidiary corporation to purchase all of the airline’s fuel at Oakland and distribute it to its aircraft throughout the state. In striking this underhanded, though wholly legal, deal, Oakland and United agreed to a 35/65 percent revenue split. San Mateo and San Francisco, which owns San Francisco International Airport, were cut out of all potential tax revenues from jet fuel sold to United. Days ago, however, San Francisco County officials spotted an unexplained drop in fuel sales tax revenues and brought it to Yee’s attention. It is impressive how quickly he turned this 11th hour piece of information into a bill ready for the Assembly.
To close this loophole, Yee introduced AB 2466 that will bar the creation of subsidiary firms such as the one used by United. It's an important piece of legislation that will restore the original spirit of 1998’s AB 66. This will mean San Mateo and San Francisco counties will once again begin receiving their split share of the sales tax revenue from jet fuel sold to United at San Francisco International Airport.
Additionally, it’s important that AB 2466 be enacted immediately before other airlines attempt to follow United’s lead. Some officials here in San Mateo County will argue that the revenue ought not to be shared with San Francisco and that Yee should must amend AB 2466 to keep the money in our coffers alone.
But in all fairness, San Francisco County owns SFO and has a right to its fair share of the money. Unless of course San Mateo wants to be in the same league as Oakland. Besides, it was San Francisco County officials who alerted Yee to this legal oversight in the first place. Without them, who knows how many more years San Mateo would have gone without noticing the flaw in AB 66. So rather than complain about sharing revenues with San Francisco, our officials and elected representatives should be thanking San Francisco for the $1 million-plus they helped secure for us.
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