Duluth International Airport wants $3.2 million in bond funding from the Minnesota Legislature to keep two major projects on track.
About one-third of the request would go to expand the airport's main terminal building, and the remaining two-thirds would pay for a new general aviation facility at the airport serving smaller private aircraft.
Brian Ryks, director of the Duluth Airport Authority, said he is asking the Legislature directly for money because of a shortfall in a state fund established to help airports make capital improvements to their facilities. The fund has three revenue sources:
A tax on aviation fuels.
An aircraft registration fee.
A tax on airlines' ground operations.
However, cash-strapped airlines have fallen about $5 million behind on payments to the fund. Northwest Airlines, United Airlines and America West are among the carriers who have sought financial shelter through bankruptcy.
The fund likely would have been able to weather the industry downturn with the help of a rainy day fund it had established. But the state slurped $15 million out of the airport fund in 2003 to ease its own budget crisis.
The state agreed to return the $15 million by July 1, 2007, but many in the aviation community are now calling for accelerated repayment in light of the current shortfall.
The Minnesota Department of Transportation's Office of Aeronautics and Aviation has frozen grant activity from the depleted airports fund indefinitely.
"Statewide, we're definitely seeing some airport improvements that will need to be delayed or canceled," said Mitchell Kilian, director of governmental affairs for the Metropolitan Airport Commission in the Twin Cities.
Kilian said the lack of state funding could have a serious ripple effect. "With that state money we leverage a lot of federal dollars," he said.
For instance, Ryks said that 93 percent of the estimated $40 million it would cost to expand and remodel Duluth International Airport terminal could come from federal sources.
So far, Ryks has had no luck convincing the Legislature to include an appropriation for Duluth International in its bonding bills, but he said he has not lost hope.
"Even if we don't receive any bond funding, I hope our efforts will help lead to the Legislature repaying the state airports fund," Ryks said. "If that happened we wouldn't need to request bonding money from the state in the first place."
Ray Strege, a principal partner in Short Elliott & Hendrickson Inc., an engineering and consulting firm working on projects with more than 30 airports including Duluth's, said partial replenishment of the airport fund looks like a distinct possibility.
Strege said several proposals for partial early repayment of the $15 million the state took from the airport fund are floating around the Capitol. Gov. Tim Pawlenty has suggested the state consider putting $3 million back into the fund, while other lawmakers have proposed accelerated payments of $5 million to $7.5 million this year.
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