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Airport board chair says expanded tax base would create financial flexibility

Alan Sender of Normal heads the board that oversees the Central Illinois Regional Airport in Bloomington.
Charlie Schlenker
Alan Sender of Normal heads the board that oversees the Central Illinois Regional Airport in Bloomington.

A bill moving through the state legislature to expand the tax base for the Central Illinois Regional Airport also would increase the maximum tax rate that could support the airport. It has passed the Senate and cleared a House committee.

The legislation would expand the boundaries of the Airport Authority from Bloomington-Normal to all of McLean County. The increase in taxing authority, coupled with an airport promise to lower the tax rate for Bloomington-Normal residents, evokes a comparison to the recent Unit 5 referendum.

The maximum corporate rate is currently 4 cents per $100 of equalized assessed valuation (EAV). By changing airport governance from a 60-year-old charter to the existing state statute regulating airport authorities, the maximum tax rate would rise to 7.5 cents per $100 EAV.

Airport authorities also can issue bonds to pay for facilities. State statute for airport authorities caps the maximum debt of an airport at 2% of the EAV. If the current bill passes the House and the governor signs it, the airport's tax base would grow from the roughly $2.6 billion worth of property in Bloomington-Normal to $4.2 billion countywide. That change would effectively increase the maximum amount of bonds CIRA could issue.

The potential increase in taxing authority does not sit well with the McLean County Farm Bureau.

“Property tax issues should be decided locally by the voters impacted and a front door referendum is the best way to do that,” said bureau assistant manager Anna Ziegler.

The farm bureau and other organizations that oppose the legislation point to the relatively small share of airport traffic from people that live in the rural part of the county — accounting for just 6,000 of more than 185,000 enplanements last year.

But Airport Authority chairman Alan Sender said the majority of passengers that go through CIRA do not live in McLean County at all, and the argument ignores the airport's larger community impact.

“You have the importance of the airport as an economic generator for the entire area, for Bloomington-Normal, for rural McLean County, and for the counties around us. Businesses will tell you this, unions will tell you this, everyone who does business in McLean County,” said Sender.

There is an argument to be made that rural voters elect lawmakers to represent them, but Ziegler said the Farm Bureau rejects that logic in this instance.

“We believe it is taxation without representation because most of the representatives and senators have no stake in this, and their constituents will not be affected directly,” she said.

Sender said the airport is not doing anything unusual by going to lawmakers instead of seeking a referendum.

“A number of years ago, the airports in three other communities, including Peoria, decided to expand their region to their full county, and that was not only Peoria, but DuPage County and Crawford County, a very small rural county on the Illinois-Indiana border. So that is the model. That is the precedent that we're following here,” he said.

Anna Ziegler, assistant manager at the McLean County Farm Bureau.
Anna Ziegler, assistant manager at the McLean County Farm Bureau.

“Just because other airports have disenfranchised their voters, you might say, we don’t think the Bloomington-Normal airport should use that method,” said Ziegler.

Even if a referendum were to happen, it is an open question whether a ballot measure to extend the boundaries of the taxing district would be defeated. Bloomington-Normal voters — who make up 77% of the county population — would be voting to lower their taxes under that scenario.

“We understand that. Rural areas are often outvoted and out voiced. But we still think making the case to the local population is the more appropriate way to approach this,” said Ziegler. “Taxes could go down now but go up in the future, and we think making that determination should be a local decision.”

Planning for the future

The total tax rate for the airport is about 14 cents. That includes the 4-cent corporate rate, close to 9 cents to support bond payments, and a minimal amount that pays for Social Security, insurance, retirement contributions, workers' compensation and auditing costs.

Airport officials have said at various venues they have no intention of raising the tax rate on Bloomington-Normal residents.

Rather, the purpose of the change, said Sender, is to allow the airport more financial flexibility in case of federal funding cuts, or an economic development opportunity.

“The airport's finances are quite strong," said Sender. "And the reason we're doing this is to (plan). When organizations, governments, or other agencies wind up getting themselves in trouble, people say why? Why didn't you plan for it? Why didn't you have something, some contingency in place so that you wouldn't be in a crisis mode? What we're doing here is exactly the kind of planful, thoughtful, look ahead to avoid any kinds of crisis in the future.”

If the tax base grows to include the entire county, Sender said, the airport would lower taxes for Bloomington-Normal residents.

“For a $175,000 house, the total tax per year to support the airport inside Bloomington-Normal is right now about $83. It would go down to about $55. With this bill in effect, if you're in rural McLean County or any of the towns outside Bloomington-Normal, that $175,000 home would incur a new tax of about $55 a year. Agricultural land would be taxed at about 61 cents an acre,” said Sender, who acknowledged the Peoria, Springfield, and Rockford airports have all raised their property tax rates to the maximum 7.5 cents.

A decade ago, the federal government threatened to end support for air traffic control towers during a budget austerity plan called sequestration. Sender said that prospect is alive again.

“It exists in the legislation that was just passed by the United States House on a very narrow margin to deal with the debt limit. That legislation as it is now would also close all of the towers that are considered contract towers in the United States,” said Sender.

Ten years ago, the annual cost to run a control tower was about $800,000. Sender said today it is probably about $1 million. Absorbing that expense under the pending legislation would have the potential to wipe out most of the promised tax reduction for Bloomington-Normal residents.

Airport leaders argued then and now that doing without a tower is not an option because all commercial passenger carriers would pull out, as would the airport’s largest employer, the package handler Federal Express. Without the legislation, they maintain, CIRA would not have revenue options to manage the federal cut and the airport would eventually run out of reserves.

CIRA has said the legislation would offer enough financial flexibility to allow the community to take advantage of economic development opportunities. Airport land has been mentioned as a possible site for an industrial park, but that project is at least several years away, according to the BN Economic Development Council, and other sites in the community also are possible.

Sender said there are no current plans that would lead the airport to use some of the taxing authority the legislation would grant.

“We have 700 acres that are developable at the airport. That's a lot of space. And we are a very attractive location, right along Route 9. We're a very attractive location on the south end of the airport because of the rail service that comes through — something that many people are not aware of, rail service that incidentally runs right to the Rivian plant. So there's nothing specific on the table at this point. But we are always on the lookout."

Sender said the bonds that funded construction of the current terminal building will be paid off in 2029 and CIRA would be debt free. That could result in a lower tax rate as well.

He said there are no facilities needs in current plans that would result in a need for new bonds.

Sender also noted the Airport Authority is one of the smaller taxing bodies in the county, with a tax rate of 9 cents per $100 EAV, if the legislation passes.

“That compares to, for example, the McLean County rate, which is about 90 cents, the Bloomington or Normal city rate with the library, which is going to be $1.40, the Heartland Community College rate, which is 57 cents,” said Sender.

WGLT Senior Reporter Charlie Schlenker has spent more than three award-winning decades in radio. He lives in Normal with his family.