Shared concerns about their airports' finances and a need to stay competitive amid a consolidating airline industry have driven three Illinois regional airports to join forces to widen their local taxing districts.
A bill being proposed to Illinois lawmakers would change the taxing structure of the airport authorities that govern the Quad-City International Airport, Central Illinois Regional Airport in Bloomington-Normal and the Chicago Rockford International Airport (Rockford). The proposed legislation, which airport leaders hope will move forward in the spring legislative session, comes less than a year after a similar attempt by the Bloomington-Normal Airport Authority of McClean County.
"The merits were good last year and the merits are good this year, but having two other communities join us does make for a stronger effort," said Carl Olson, executive director of the Bloomington-Normal airport. "All the airports believe very strong in this because it is for the benefit of those communities."
According to Olson, whose airport has been tackling the issue for more than three years, each airport has its own set of issues and "trigger points... but we're all in the same boat. We're all suffering from the volatility and inconsistency of state and federal funding."
Under the proposed bill, the airport authorities would be reorganized and their taxing boundaries expanded county-wide, he said.
For Rock Island County Metropolitan Airport Authority, the Quad-City airport's governing board, that would mean it could levy property taxes to taxpayers across all 18 of its townships. As the statute is now, taxpayers in only seven townships — those with populations of 5,000 or more — pay property taxes to the airport.
In McClean County, where the Bloomington-Normal airport resides, Olson said currently only residents in Bloomington and Normal pay property taxes to the airport. Under the legislation, he said "The entire county would equally support the airport just as the entire county benefits from the economic benefits of the airport."
Discussions about the taxing authority and its impact are relatively recent for the Quad-City airport, whereas McClean County has been investigating the idea for a few years.
Roger Strandlund, the Quad-City airport's attorney, pointed out that the legislation would provide the airport with "additional authority from a taxing standpoint — the emphasis is on authority."
He stressed that the local airport authority has made no decisions about what it would do if given the authority to expand its taxing district.
Olson, who is helping spearhead the process, said there are three main objectives of the new bill:
- Create a more dependable and locally controlled revenue stream for airport operating budgets and capital projects.
- To be more competitive in retaining and attracting air service, new economic development, job growth and private investment.
- Provide tax equity among taxpayers in the county, by having the authority to tax all the county's taxpayers.
"There will be local nuances," he said. "But generally speaking, all three airports are in the same position."
Funding issues have arisen in Rock Island County as the airport has grappled with declining passenger numbers, less capacity in airline seats and a more competitive landscape.
After an airport authority meeting last week, Angela Burch, the Quad-City airport's controller, said "Right now, we're just talking about the taxing district expanding so people who are utilizing the airport are the ones contributing to it."
The current discussions only look at expanding the taxing district in Rock Island County, but officials have pitched the idea about including Scott County in the airport's taxing district.
Olson said the Bloomington-Normal airport first began looking at changes in its tax base after the 2013 federal sequestration nearly closed down the airport's air traffic control tower. After filing a lawsuit, the tower's federal funding was restored but he said his board asked "If this happens again, how are you going to fund the tower?"
He stressed that in the case for Bloomington-Normal, "This isn't about generating more revenue. This is about contingency planning, competitive positioning and moving forward in a stronger fashion."
In fact, he said existing McClean County taxpayers likely will see their taxes stay the same or go down if the tax bill is spread over 100 percent of the county's taxpayers vs. the 75 percent who now pay.
Olson said the issue is just as much about tax equity. "Even if citizens don't fly on airplanes they benefit from our airport," he said. The Central Illinois Regional Airport has an annual economic impact of $180 million, including a direct and indirect payroll of $45 million. As much as 40 percent of that impact goes into the smaller towns and rural areas.
"For us, this is about strengthening our tool box to be a good economic development partner in the community," Olson said.