Arkansas Airports Finding New State Funding Elusive

The state's two largest airports have all but shelved hopes of persuading the Legislature to help finance their long-range capital improvement needs.

Officials at Little Rock National Airport, Adams Field, held out the possibility that the airport could receive a slice of the state's expected $843 million surplus to help it complete some property acquisition that's estimated to cost more than $16 million.

Northwest Arkansas Regional Airport executives said they wanted to take a step back, enlist the support of other airports and put together a legislative proposal that could be ready for the 2009 regular session.

"We are dreaming, but we are not finding any buyers for that dream," said Kay Kelly Arnold, a member of the Little Rock Municipal Airport Commission who recently met with newly installed Gov. Mike Beebe.

Arnold told her colleagues at the commission's regular monthly meeting that given Beebe's other priorities, the governor was not going to get behind proposals airport officials have aired.

"Given the other priorities, and other issues he has established, I understand that completely," said Scott Van Laningham, executive director for Northwest Arkansas Regional.

Beebe has proposed reducing the state sales tax on groceries from 6 percent to 3 percent, effective in July. That would cut about $125 million a year from state general revenue, according to the governor. He also has said that at least $250 million of the surplus should go toward public school facilities. Beebe also has called for other spending and tax-cutting priorities.

But Little Rock National might not come away from the legislative session empty-handed, Arnold said. "It's entirely possible ... we could get some one-time funding to complete acquisition" of some land the airport has targeted.

Arnold was referring to a 119-acre swath of property north of the airport that's estimated to cost $16.7 million, said Judy Ross, the director for property, planning and development at Little Rock National. The acreage contains 232 parcels, including 66 residences and three businesses.

The airport has acquired little of the land so far. "We've only purchased four properties at this point," Ross said.

Together, Little Rock National and Northwest Arkansas Regional had hopes of securing enough state money to make a more sizable dent in the $500 million in pending capital improvement projects they collectively have on the drawing board.

Little Rock National officials hope to build a $250 million terminal and want to acquire more land for, among other things, economic development. Northwest Arkansas Regional needs to expand its terminal to attract a low-cost carrier or other airline. It also wants a new runway.

In trying to make their case, officials at both airports argue that their facilities are economic engines for their region and the state, together generating an annual economic impact of $1.6 billion, thousands of jobs and millions of dollars in payroll. About 4 million passengers fly in and out of both airports annually.

Meanwhile, they take in no continuing revenue from a city, county or state taxing authority Neither airport wanted to ask for a share of the state's anticipated surplus because they preferred a source of continuing money.

Both preferred sharing in existing taxes on jet fuel, parking revenue and car rental revenue that now go to the state. Little Rock National, for example, could receive an estimated $4.5 million or more annually if it received half of the state taxes on jet fuel, parking revenue and car rental. Together, the state's two largest airports now pay more than $9 million in state taxes on those items.

They also proposed a new 1 percent sales tax on airport fuel, concessions, car rental and general aviation services, which could generate $1.2 million or more annually for Little Rock National and $400,000 or more for Northwest Arkansas Regional.

Arnold said Little Rock National officials would still pursue an exemption from city and state sales taxes on items the airport purchases, which could save it $300,000 annually. Northwest Arkansas Regional already has the exemption.

This article was published 01/17/2007

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