See what happens when you wade into politics…
Yesterday, I wrote about the backlash Delta was facing over its convoluted stance on the National Rifle Association. In response to the recent Florida school shooting, Delta removed its group discount for the NRA. Facing backlash, it issued a statement proclaiming that it was “neutral” in the gun debate but “supports” the Second Amendment (the right to bear arms).
But now the backlash has intensified and Georgia’s Republican-controlled legislature is threatening to block a lucrative fuel tax cut unless Delta restores its NRA discount.
I will kill any tax legislation that benefits @Delta unless the company changes its position and fully reinstates its relationship with @NRA. Corporations cannot attack conservatives and expect us not to fight back.
— Casey Cagle (@CaseyCagle) February 26, 2018
Casey Cagle is Georgia’s Lt. Governor and President of the Georgia State Senate.
First Issue: Is this Legal?
Can a legislature condition funding on satisfying actions?
The LA Times offers contrasting legal views.
Erwin Chemerinsky, dean of the UC Berkeley School of Law focused on the chilling effect such action would have on Delta’s First Amendment right.
Of course, the government official has the right to free speech. But punishing a company (or person) because of its political actions raises very serious First Amendment issues. It is hard to evaluate at this stage, but for the state to penalize Delta for its political stance would be very problematic under the First Amendment.
But Eugene Volokh, a professor at UCLA Law School, sees no problem the legislature denying Delta a tax cut–
They may be playing political hardball, but that’s not a 1st Amendment violation… Contributing money for the purposes of speech is protected by the 1st Amendment. If the government can limit the use of money for purposes of speech, it will be limiting speech. [But] spending money in other contexts — or choosing not to spend money, or choosing not to give a discount in an economic transaction — is completely regulable by the government, broadly.
I think Volokh makes the better legal argument. Government officials cannot regulate political speech, but they can regulate a company’s commercial activity. Whether that is a good idea or not is not my point.
Second Issue: Delta’s duplicity on subsidies
I love exploring the First Amendment concerns surrounding this issue, but the more important matter: what the heck is Georgia giving Delta a tax cut for?
Here, Delta stands to save $50 million each year through reduced fuel taxes courtesy of the Georgia tax payers. These subsidies are under the guise of bringing additional air service to the state. By not taxing airline fuel, the Georgia legislature hopes to attract flights and more airlines.
We can argue over whether Delta “deserves” this tax break or not. We can question whether a carrier flush with cash who even owns it own refinery in the Commonwealth of Pennsylvania, needs assistance from the state.
But that’s not the point. The point is hypocrisy.
For all it’s protest over Middle East subsidies, Delta has never seen a tax cut or subsidy it did not like. It berates competitors for “unfairly” accepting state aid, but has never turned down sate aid itself. It condemns Gulf Carriers as job thieves, even though they spend billions of dollars on Boeing jets, while investing in Airbus aircraft for its new flagship product.
Oh, the Georgia legislature should be careful indeed. With 33,000 employees, Delta is the largest employer in the state. Delta has also done tremendous good for the state and its citizens in offering convenient and reliable air travel. But I don’t ever want hear another subsidy argument from Delta again.
Mark this story as developing. It fascinates me and represents a juicy intersection of the law and travel. If I’m a betting man, I expect Delta to make a conciliatory gesture, perhaps even the restoration of its NRA corporate discount, in order to secure its lucrative tax break on fuel.