Taxpayer tab totals $111.3M to keep Southwestern Illinois airport open
Each year St. Clair County taxpayers must add money to keep MidAmerica St. Louis Airport open. COVID-19 could turn a hefty financial burden into an albatross.
St. Clair County taxpayers had to add another $7 million to keep MidAmerica St. Louis Airport open in 2019, according to auditors. That brings the total subsidy to $111.3 million since 2002, when auditors first reported the amount needed to balance the airport’s books.
That $7 million infusion was up from nearly $6.3 million needed in 2018, and came even though auditors said rising passenger service and other operations added $338,000 over the prior year and expenses were cut $1.2 million.
“It is anticipated that the County will not be able to increase budgets again and that general fund balances will continue to help finance Airport operations in the near future,” auditors wrote, noting that cuts in state revenues and increases in unfunded state mandates were driving overall county budget problems as well.
The bigger question may be how much cash will be needed during 2020, as COVID-19 decimates the airline industry and chokes passenger traffic. Current passenger traffic data for MidAmerica was unavailable, but the only passenger carrier there offered 10 destinations a year ago and currently lists only seven.
Airlines nationwide saw a 96% drop in passengers during the first full month of the pandemic. On Aug. 27, passengers remained at 28% of what they were the prior year, according to the Transportation Security Administration.
St. Clair County homeowners should be concerned that scarce resources are flowing to a project unable to turn a profit. They should also ask how bailing out the airport is affecting their property taxes and home values, especially the value of a rural home where they rarely see a sheriff’s deputy on patrol because that money is keeping an airport staffed.
Since the Great Recession, St. Clair County home values fell by 23% after adjusting for inflation, according to data from the Bureau of Economic Analysis. Also from 2007-2017, Illinois Department of Revenue data show property tax bills in St. Clair County grew 5%, after adjusting for inflation.
Shortly after the airport opened in 1997, it was the subject of a segment on NBC News’ “The Fleecing of America.” NBC returned in 2010 and again in 2015 to find the airport in sad shape. In the 23 years since it opened, the airport has suffered a string of failed passenger carriers and unsuccessful attempts to build its cargo business, earning monikers such as the “Gateway to Nowhere” and “Glass Palace on the Prairie.”
County leaders have said increases in passenger traffic will improve the airport’s finances. Traffic did increase slightly in 2019, with 153,753 passengers getting on or off a plane. That was just shy of 1,500 more than in 2018, according to Federal Aviation Administration data.
But it also meant taxpayers essentially handed nearly $46 to each passenger in 2019, up from just over $41 in 2018 when the cash used to balance the airport’s books is divided by the number of passengers.
Interest paid on airport debt was $4.2 million in 2019, which continues to be a major expense although it was down slightly from the prior year. The aging airport also depreciated by $6.1 million. That drove the airport’s $2.8 million reduction in net position, which is similar to net worth.
The airport originally cost $300 million. In 2015, St. Clair County leaders decided to refinance the remaining $40 million in construction debt and stretch out repayment to 2045, a move that increased taxpayers’ debt burden to $88 million. And, as auditors stated, “interest continues to be a major expense of the Airport.”
St. Clair County received $40 million as its share of property taxes in 2019, which was $1.7 million more than the county budgeted for. Where did the windfall money go? Apparently it was sucked into a jet engine and shredded.