Idaho Airport Tax
5:23 pm
Mon November 4, 2013

Tax Votes Shine Spotlight On Challenges Facing Small Town Airports

Originally published on Mon November 4, 2013 4:22 pm

A ballot measure in the Sun Valley area is emblematic of the challenges facing small airports across the West. Residents of Hailey and Ketchum, Idaho decide Tuesday whether to raise city taxes to subsidize commercial airline service.

Voters in the neighboring Idaho resort towns are being asked to raise the lodging and rental car tax, and in the case of Ketchum add a 1 percent retail sales tax, although groceries and gas would be exempt from the higher tax.

The proceeds of the dedicated tax increase would be used to entice airlines to serve Sun Valley's airport, either through subsidies or advertising support.

Eric Seder chairs the board of the marketing non-profit Fly Sun Valley Alliance. He says every airline he's approached lately wants a contract guaranteeing the profitability of the route.

"It's so difficult for them to make money," explains Seder. "They just can't serve a market like this without some assurance that they're going to make a certain amount of money."

Seattle-based Alaska and Horizon Airlines received revenue guarantees from three ski destinations it serves: Sun Valley, Mammoth Lakes, California and Steamboat Springs, Colo.

"These guarantees have introduced air service to communities that would not have gotten service otherwise," said airline spokeswoman Bobbie Egan via email.

No organized opposition group has sprung up against the air service tax proposal in Sun Valley. But there are letter writers and online commenters who grumble about subsidizing profitable airlines with taxpayer money.

In an election last year, voters in the City of Sun Valley approved the local option tax hike for airline service, but it fell just short of approval in neighboring Ketchum and Hailey. Sun Valley's dedicated tax does not take effect until Ketchum votes for it too on this second try.

Idaho requires 60 percent majority approval to levy a local option tax. If approved in all three Wood River Valley towns, the dedicated tax is estimated to generate about $2 million per year.

Another approach some smaller Northwest communities have taken to support airline service is to apply for temporary federal grants. This September, the U.S. Department of Transportation awarded separate $500,000 grants to Sun Valley and Idaho Falls to recruit an airline to serve a hub to the east.

Klamath Falls received $135,000 and Wenatchee got $200,000 for marketing to increase enplanements at their small airports.

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