Editorial: It's Time for a Whole County to Pay CIRA Airport Tax

 An inbound American Airlines jet taxis to its gate at CIRA March 22. (Image credit: Breanna Grow)

An inbound American Airlines jet taxis to its gate at CIRA March 22. (Image credit: Breanna Grow)

Editorials are opinion pieces written by community members who serve on AdaptBN's Editorial Board. The opinions expressed in these articles are those of the author and do not necessarily reflect the opinions of AdaptBN.

The Central Illinois Regional Airport (CIRA) has resurrected its 2017 effort to expand its property tax base from Bloomington-Normal to all of McLean County. CIRA’s initial go-it-alone effort failed because it could not find a local legislator to sponsor the measure. CIRA is now collaborating on the legislative effort with regional airports in Moline and Rockford.

The vehicle for the airport tax expansion effort is House Bill 5816, currently in the House Rules Committee and sponsored by Rep. Jay Hoffman, a southern Illinois Democrat from Belleville. His district does not include any of the counties impacted by the bill: McLean, Winnebago and Rock Island. The proposed bill would reorganize the airport authorities of the three airports and expand their taxing boundaries countywide. The regional airports in Peoria, DuPage and Crawford counties already have a countywide airport tax in place. 

Still, the bill has a long journey to passage. It has been assigned to the House Rules Committee, where it must receive a majority vote to move to the House floor for debate. Democratic Speaker Michael Madigan controls the five-member committee, composed of three Democrats and two Republicans, one of whom is Bloomington Rep. Dan Brady. 

CIRA Executive Director Carl Olson is seeking support for the bill from local legislators and presents some persuasive arguments for its passage. The purposes of the bill would be to:

  1. Establish a more dependable and locally controlled revenue stream for operating and capital projects
  2. Provide a more effective toolbox to enhance CIRA’s competitive position to attract aviation and non-aviation investment and services
  3. Protect tax equity—the $165 million annual economic output to McLean County generated by the presence of a regional airport

Consider CIRA’s financial history. In 1964, the Airport Authority created the Bloomington-Normal Airport. At that time, the income for the general operating fund came from 75% local taxes and 25% airport business operations. By 2017, the percentages had changed to 40% support from local taxes and 60% from business operations. However, “The Airport Authority has not raised property taxes ever,” said Olson.

Olson also said the Airport Authority has been “a good steward of public money," pointing to the $7.8 million that it has abated in taxes over the last 9 years. Olson emphasized that “only a trigger event, such as loss of state or federal funds, would cause the Airport Authority to raise its property tax rate.” CIRA dodged one such bullet in 2013, when federal support for the airport tower was withdrawn. Olson said: “We filed and won a lawsuit for restoration of this funding, as did several other airports that also lost tower funding. Our finances are strong but if you drop a $600,000 to $700,000 bill on us, [our finances] will take a hit.” 

What is the impact of a countywide airport tax in McLean County? If this bill passes, Olson predicts “Bloomington-Normal property taxpayers will receive 31% lower airport taxes while the rest of McLean County would pay a new airport property tax of about $41 [based on a $150,000 home].” Also, he expects the current airport tax rate of  $0.119 per $100 of assessed property value to decrease to $0.082 cents if the bill passes.

According to a recent economic impact study done by the Illinois Department of Transportation (IDOT), CIRA directly and indirectly supports more than 1,200 jobs in the community, including 300 jobs at the airport, 40 jobs for capital improvement (e.g. construction workers) and 238 visitor jobs (e.g. restaurant, hotel, gas stations), among others. The IDOT study calculated that the presence of CIRA in the community generates a payroll exceeding $46 million. Olson said a recent study of airport workers with badges found that 40% live outside of Bloomington-Normal. (Employees with badges include those who work “within the fence” such as TSA workers, he explained). 

The presence of a strong regional airport is key to a thriving economy in Bloomington-Normal and McLean County. While airport finances remain strong, CIRA faces headwinds with significantly declining passenger traffic for the past six years and concerns about continued state and federal funding support.

The countywide air tax proposal appears to be more about broadening the tax base for the airport than increasing taxes in McLean County. In 1964, when the airport was a much smaller municipal airport, it made sense to tax only the residents of Bloomington and Normal. Today, 54 years later, CIRA is a much larger regional airport and the taxing structure of the airport should reflect this development.