Misperception #1: City Tax Dollars Go To the Airport
Before reading this blog entry, be sure to read the accompanying entry, “ Cameroon Monkeys and Leaky Windshields .”
City tax dollars pay for the airport. This misperception is wielded like a weapon. The accuser stands tall, spinning the ball and chain above their head while yelling, “I don’t like 'fill-in-the-blank' and you’re wasting my tax dollars!”
Here’s how it really works…
The airport (meaning the land and facilities) is owned by the City of Springfield. The airport is managed by an independent 11-member administrative board.
When I say “independent,” here’s what I mean: acting as an independent body, the board plans, develops, operates and maintains existing and future airport properties, and the overall management of employees. Airport Board members are appointed by the city manager, with confirmation made by the city council.
The board operates the airport as a self-supporting enterprise function. Enterprise funds are used widely across the country—here’s how the Minnesota Department of Administration defines it:
A type of proprietary fund that is established to account for operations financed and operated in a manner similar to private business enterprises (i.e. water, gas, and electric utilities; parking garages; transit systems; or airports). For enterprise funds, the governing body intends that the costs of providing goods and services (i.e. operating expenses, including depreciation), to the general public on a continuing basis should be financed or recovered primarily through user charges.
Here’s how it works at our airport: daily operations are funded by money generated from leases and contracts with the airlines and other businesses using airport facilities. Grants from the Federal Aviation Administration (FAA) are received on a matching basis for the funding of qualifying improvement projects. Federal grants are funded mainly by federal taxes on airline tickets, aviation fuel and cargo shipments.
Make no mistake—there are “taxes” at work here, but there’s an important distinction to make: they are not taxes on everyone—they are taxes on the companies and individuals who use the airport. Some people call these user fees. Regardless of what you call them, not one cent of tax money comes to the airport from the City of Springfield. In fact, the airport pays the city for the following services: human resources, purchasing, finance and law. With the exception of these city services, which the airport pays for, all money generated by the airport must stay at the airport. It would be illegal (under federal aviation law) to send the money elsewhere.
Now what about those “user fees?” The best known one is called the passenger facilities charge (PFC). The PFC program is overseen by the FAA. It allows airports to charge passengers getting on a commercial plane a fee for using the airport. The money collected is then used to fund airport projects that are FAA approved. Our new terminal is largely financed with PFCs. The current PFC charge is capped at $4.50 per ticket. It can’t go up without federal legislative approval.
Airports charge the PFC only when they have an FAA approved project online. The PFC ends when the project is paid for. It continues when another project comes online. Airports do not have to charge a PFC, but many do. It’s one of the main funding tools for airport improvements. You can find more information on PFCs on the FAA web site. Or here.
Bottom line: the money generated by the airport is “public” in the sense that the airport is owned by the city (the public). But it is not “tax money.”
Read more about the inner workings of the airport on our main web site.
Kent
1 Comment
Reader Comments (1)
i know this is something you don't want to talk about, but I have a good friend who went to college with me in orlando he works in Ft. lauderdale and he told me allegiant contacted his office to see if they would use a flight to springfield. It is a huge corporation that sends people to Branson at least bi-monthly. I was wondering and i know you can't say if this is a common practice of an airline while investigating our market or if it means they are getting closer to considreing adding our market. Thanks and i hope this si something you can answer at least how the airline goes about that.