March 29--A local state legislator hopes to "level the playing field" for Illinois airports by providing a tax incentive for companies to export from the state. Similar legislation is making its way through the Missouri legislature.
State Rep. Jay Hoffman, D-Belleville, introduced legislation he hopes will increase international cargo flights out of Illinois -- in particular, from MidAmerica St. Louis Airport in Mascoutah. The tax incentive is the latest legislative volley in a competition between Illinois and Missouri lawmakers to draw cargo freight businesses to their respective state.
"We are attempting to work with various airports throughout the state, like MidAmerica, to help provide incentives for companies looking to ship exports to other countries and, in turn, provide jobs and economic development here at home," Hoffman said.
One expert is wary of the promise of economic growth through tax incentives.
Richard Dye, an expert on state finances related to economic development, said specific tax credits need to be scrutinized closely before approval, though, some have succeeded in the past.
"The general consensus among economists is it's a race to the bottom," Dye said. "Incentives don't work, but politically no one wants to be the one to get blamed for not getting businesses. The political attractiveness trumps the negative zero sum game."
St. Clair County Board Chairman Mark Kern and the county's Public Building Commission, which oversees MidAmerica airport, endorsed the proposed legislation. The county is hoping to capitalize on a partnership with Ningbo Lishe International Airport in China to bring Midwestern and South American goods to 250 million Chinese customers.
The legislation would amend the current Illinois Income Tax Act by creating a tax credit of 50 cents per kilo shipped out of the country from an Illinois airport. The tax credits will be capped at $7.5 million per year.
Hoffman said the incentives were needed to provide a "jumpstart" to the air freight industry in Illinois -- at MidAmerica but also Rockford and O'Hare airports in Chicago.
The Missouri Export Incentive Act would grant a tax credit of 40 cents per kilo of exported goods shipped from the state. The tax credits also are capped at $7.5 million per year.
"These incentives are similar to what they are looking at doing in Missouri at Lambert (St. Louis International Airport) ... ," Hoffman said. "We want to make sure we in Illinois are on a level playing field vis-a-vis between states. I understand the difficulty of giving economic incentives in difficult legislative times, but this is designed to be incremental and not cut into existing revenue with the state."
A previous venture looking at whether airports and government entities in the St. Louis region should coordinate efforts to draw cargo flights never left the runway.
St. Clair, Madison and St. Louis county officials, state and federal leaders, along with staff from Lambert and MidAmerica airports considered creating a regional airport authority in 2007, but the differences between the airports proved too great. The nonprofit regional planning group East-West Gateway Council of Governments coordinated the effort.
The study found each airport had its "niche" and a central authority was not the answer, according to East-West Director of Transportation Planning Jerry Blair.
Hoffman said the metro-east's established road system, railroads and river traffic make it a natural conduit as a transportation hub.
"The focus in our region should be utilizing our assets in order to make jobs and economic opportunities," Hoffman said.
Contact reporter Daniel Kelley at [email protected] or 618-239-2501.
Copyright 2013 - Belleville News-Democrat
