Wednesday, July 11, 2012

Cities to consider tax for air service

Group seeks to implement new LOT

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By KATHERINE WUTZ
Express Staff Writer

Voters could be asked to decide in November whether the cities of Ketchum, Sun Valley and Hailey should levy an additional 1 percent local-option tax to ensure continued and expanded commercial air service.

Fly Sun Valley Alliance President Eric Seder said local organizations are coming closer to solution for using a separate local-option tax to fund minimum revenue guarantees.

"It actually wouldn't even raise it," Seder said. "It would be a separate LOT. It would be short-term, so the community gets a chance to see how it works."

He said the tax would be in effect for five years or so. He said that as well as funding minimum revenue guarantees—money paid to airlines to ensure they make a certain amount of money in small, risky markets—the tax revenue would also pay for marketing to promote those flights. It would also cover whatever is needed to collect the tax.

This option for helping keep air service running to and from the valley was kindled in March, when the Idaho Attorney General's Office issued an opinion that cities could legally contribute to minimum revenue guarantees.

In a letter dated March 13 to state Rep. Wendy Jaquet, D-Ketchum, Assistant Chief Deputy Attorney General Brian Kane stated that if operation of an airport can be shown to be a public purpose, and if minimum-revenue guarantees are shown to be crucial to the continued operation of the airport, cities could contribute funds to them.

However, the letter contains a caveat that legality of the agreements would be "dependent on the actual agreements drafted and entered into," and it urges "great care" in drafting those documents.

Seder said the cities and other local stakeholders are in the process of hashing out a joint powers agreement for overseeing the disbursement and administration of the tax, as well as how the funding could be spent.

An authority formed by a new joint powers agreement would have no power over the Friedman Memorial Airport's operations, County Commissioner Bowman said, and the county's role in forming an agreement would only be as a part-owner of the airport.

"This really is a question for those city councils," Bowman said. "The county's role would be merely as a possible member to the JPA that could determine how those moneys, if approved, would be distributed."

Seder said Fly Sun Valley Alliance would make presentations to the city councils beginning on Monday with Ketchum. The cities would need to make a decision on whether to put the question on the November ballot by the last week of August.

Kate Wutz: kwutz@mtexpress.com

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