Airport tax hits turbulence

For more than 10 years, the St. Paul Downtown Airport has avoided city and school taxes in exchange for payments to the St. Paul Police and Fire departments and a promise that businesses affiliated with the airport would mentor local students interested in aviation careers.

A bill sponsored by Rep. Carlos Mariani (DFL-St. Paul), HF3509, would eliminate the tax exemption passed by the Legislature in 1996. The House Property Tax Relief and Local Sales Tax Division laid over the bill March 28 for possible inclusion in its omnibus bill.

Currently the airport is liable only for county and special taxing district property taxes, which is also the case at Minneapolis-St. Paul International Airport.

The bill sparked a discussion about whether the tax breaks are beneficial to the city.

Some argued that businesses park their planes at the St. Paul airport because of the tax breaks, and in return, they create jobs for the community.

Clint Kummer, general manager for Signature Flight Support, said that before the tax break, “St. Paul was underutilized and struggling.” Kummer’s company provides ground support for aircraft, and he said that business is much better now, thanks to the 1996 legislation.

“With the recent economic downturn, it really impacted our industry as a whole,” he said. “The soaring fuel prices, combined with additional taxes and the competitive advantage Minneapolis would again enjoy, would endanger the prosperity and future of our businesses at the airport.”

Others questioned whether it was fair to give a tax break to the airlines, which cater mainly to corporate traffic, when small businesses that border the airport must pay full taxes.

Mariani, who sponsored the House bill in 1996, said it’s time to re-examine whether the exemption is needed, and if surrounding property owners are unfairly picking up the tax burden.

“That’s become increasingly acute given the fact that the city of St. Paul has … real loss of ground in LGA,” he said, referring to state-allocated Local Government Aid.

Sen. Sandy Pappas (DFL-St. Paul) sponsors the companion bill, SF3731, which has been laid over for possible inclusion in an omnibus tax bill.