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Airports may soon be able to incur debt

Airports may soon be able to incur debt

Dustin Hurst
February 18, 2010
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February 18, 2010

One day after approving a similar plan for public hospitals and medical facilities to do so, the House State Affairs Committee on Thursday also gave the nod to allow public airports to incur debt in the purchase of new land or the construction of new facilities.

According to the proposal's sponsor, Rep. Fred Wood, R-Burley, using an interpretation of the law from a 2006 Idaho Supreme Court case, public entities like airports are required, by the Idaho Constitution, to get a two-thirds approval from local voters before entering into long-term debt obligations.  At the Wednesday hearing for the proposal for medical facilities, Wood argued that the requirement for voter approval are too cumbersome and burdensome on the entities involved.  In his testimony before the committee Thursday, Wood said that,similar to the other proposal, airports would never be allowed to use taxpayer dollars to pay off debt.   The money to pay any debts would come from normal airport sources of revenues, such as tenant fees assessed to those who rent airport space.

Richard McConnell, director for the Boise Airport, said that more than 70 percent of people who use the airport are not residents of Boise, so the airport does not receive any tax dollars from those individuals.  He said that the fees are the way the airport extracts funding from those travelers and could help to pay off debt.  He also assured lawmakers of the financial stability of the airport.

"There has never been a time when the airport has operated at a loss," said McConnell.

The Boise Airport lost out on the chance base a major repair facility on its property because of its inability to incur debt to build the necessary buildings, said McConnell. He said that a regional carrier had approached the airport with the opportunity, but instead chose the airport in Reno, Nev., because the Boise Airport could not build an additional hangar that the airline wanted.

Debt could also be vital Idaho landing the F-35 joint-strike fighter jets at Gowen Field, which shares the same land as the Boise Airport, said McConnell.  He added that the airport would need to invest in new property or buildings should the planes eventually be based in Boise.

The measure passed despite one dissenting vote from Rep. Joe Palmer, R-Meridian.

The resolution now moves on to the full House for a vote.  Because it is a constitutional amendment, the measure requires a two-thirds vote by both Houses of the Legislature, the signature of the governor, and a majority approval by voters in the general election in November.  The cost of the bill, which is estimated at $35,000-$40,000, is associated with the process of putting the proposal on the ballot

(Note: Read about the proposal to allow medical facilities to incur debt here.)

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