The Airport Passenger Head Tax Analysis of Its Potential Impact

The report examines the financial posture of approximately 55 airports which adopted head taxes in 1973, and evaluates the impact of the tax on airport operations and development programs. Results of the analysis indicate that only the largest airports surveyed--those with annual passenger enplanements exceeding 275,000--were typically able to meet their operating expenses and debt payments with self-generated funds. Most NonHub facilities surveyed (passenger enplanements less than 97,000 per year) required some form of subsidy just to meet operating expenses. Considering the financial requirement of air carrier airports, the revenue potential of the passenger head tax and the small impact of the tax on air travel demanded, this report finds no significant financial argument for maintaining the prohibition of head taxes.