Airports Make the Case They're Worth the State Funding
January 8, 2010
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  • Industry leaders hope report of economic impact will help deter planned funding cuts

    By Bruce C. Smith

    Would Boone County have landed the Medco pharmaceutical facility without a general aviation airport close by?

    Or would the distribution centers, hotels and retailing with thousands of jobs have grown in Plainfield and the Ameriplex business parks if Indianapolis International Airport wasn’t next door?


    However, aviation industry leaders think the availability of airports is crucial in the mix of reasons why companies chose one site over another for a new business.

    An economic impact study recently made public by the Aviation Association of Indiana shows the 104 airports open to the public give a multibillion-dollar punch to the state’s economy each year. And aviation industry leaders hope the newest report will encourage lawmakers in the coming session of the Indiana General Assembly to spend a little more and match federal grants for airport improvements, ultimately creating local jobs.

    “I realize that money will be tight with the state. Funding has been cut for the aviation division of the Indiana Department of Transportation, which affects the state money available to match federal grants. But with airport revenues down and property tax limits becoming effective, federal grants are a great way to bring money and jobs to the state,” said Bart Giesler, executive director of the state aviation association.

    “What we’re talking about is every dollar from the state can bring $39 in federal funds” for airport construction that ultimately encourages businesses to create jobs, Giesler said.

    The state aviation association, representing airport operators and others in the industry, estimates Indiana airports had an economic impact in their communities totaling $5.2 billion in 2007, the most recent year for which statistics are compiled.

    The industry trade group’s 12th biennial report estimates the direct and indirect impact of airport economic activity totaled $3.2 billion in 2007.

    That includes payroll of $640 million for about 17,100 airport workers, plus operating and capital spending on the facilities. The study estimates some of those dollars are circulated locally for an additional impact of $1.4 billion.

    The study estimates $600 million was saved in transportation costs because travelers and companies had local airports close by and didn’t have to drive farther to get to an airport.

    The total impact of Indiana airports of $5.2 billion in 2007 is up from $4.9 billion in the previous study, based on 2005 figures.

    Some of the increase is attributed to the impact of dollars spent on construction at Indianapolis International Airport, Giesler said.

    The next association report might show the recession has dimmed aviation’s punch for Indiana. Air passenger travel is down 9.1 percent, and cargo weights are down about 14 percent this year at Indianapolis International.

    In fiscal year 2009, Giesler said, Indiana’s public airports — not counting the 400 private airfields — completed almost $80 million in construction projects. About $9.2 million of that total was at Indianapolis International.

    Federal grants pay for about 95 percent of many projects at local airports. The state has contributed 2.5 percent, and local governments or the airport operators chip in the other 2.5 percent. Planned budget cuts would trim the state’s share to about 1.25 percent, meaning less matching money would be available, or approximately half of the $1.38 million spent last year by the state to leverage federal grants.

    “That’s why we say that it would be hard to find a better rate of return for the state’s investment,” Giesler said.

    Dan Montgomery, operator of Indianapolis Executive Airport, said that airport has made about $8 million in improvements in the past several years, including a new terminal and a canopy to shelter passengers boarding and leaving their planes. Other improvements were made to the runway and the safety and light systems.

    All are perks that have made the facility north of Zionsville in Boone County, but owned by Hamilton County, a favorite with business executives.

    At least 20 private jets are based there, and it is used by companies settling in the region, including the Boston-based planes operated by pharmacy company Medco, Montgomery said.

    The investment and upgrades at Executive Airport, some of it matched with 2.5 percent funding from the state, created an estimated $87.99 million in annual economic impact, according to the state association’s newest estimate.

    Montgomery, who also manages Frankfort Municipal Airport, said any loss of state funding would ripple through small-town airfields more seriously.

    “Frankfort is applying for federal funds for a new taxiway next year, but they may have to forgo that project if the state match isn’t available. When you’re talking $1.6 million for a project, the local match begins to add up, and it becomes very difficult when the cities are strapped.”

    Date: 2010-01-01