Airport To Recieve Property Taxes - Make No Mistake About Their New Plan

The Indianapolis International Airport Board has okayed the long term land use plan developed over the past year. (see Chris O'Malley's,IBJ reporter, take on the deal "Airport could land $63 million annually from land development")

Nothing happens at the Airport that is not okayed by Mayor Ballard. The Mayor gets to appoint 6 of the 8 members.

This plan depends upon the Airport holding on to vast tracks of land that it no longer needs for its own operations. That would include the old terminal and adjacent parking and car rental facilities. Much of the land in question is situated in Wayne Township, but some is inside Decatur as well.

O'Malley reports:

The potential of generating up to $63 million for the airport annually is based on land-rent income only, Berta Fernandez, executive vice president of Landrum & Brown, told the board.

But it’s likely the airport, in conjunction with other governmental entities affected by the airport, will have to offer incentives to lure businesses. Competition is already robust among other communities and other states waving around tax abatements and other lures.

It always amazes me that Republicans claim to be so committed to the free market, yet continuously set up these types of unfair competition situations that taxpayers ultimately are funding.

If the land were returned to the tax rolls, property taxes would be paid on the land as well as any improvements built on the land. In this scenario, the companies would pay taxes only on their improvements and lease the land from the airport. The whole thing hinges on the lease payment for the land being less than the property taxes that would have to be paid if the Airport sold off the land to private developers.

In effect money that could have gone into property taxes would flow instead to the Airport. The remainder would constitute a permanent property tax abatement.

This most assuredly affects Wayne and Decatur Township, whose property tax levies unfairly tilt toward homeowners, as the Airport controls so much land. Half of all property taxes go to the schools in each township.

Other consequences, though, include the unfair competition that comes about when one company sits on Airport property, and its competitor does not. This is exemplified by gas stations that now sit across the street from each other in Wayne Township. The subsidy envisioned to 'lure' businesses to Airport property will also unfairly compete with the full development of Ameriplex.

While the burden of an airport for central Indiana falls on Wayne and Decatur Townships, that burden should be no more than is absolutely necessary. The abject failure of the Ballard Administration and the Airport Authority to return unneeded property back to the tax rolls places just such an unnecessary burden on Wayne and Decatur taxpayers. But, make no mistake about it, City coffers, Library coffers, IndyGo coffers will also be lightened by this misguided plan to divert new money to the Airport. The City-County government takes in roughly a third of all property tax revenues. If the deal means $63 million a year to the Airport, it would mean at least a loss of $20 million a year that could have gone to our City and County government. And not a single new tax would have to be levied nor rate increased. All it would take is for the Airport to do exactly what it should to - return the unneeded land to private develoment and commerce.