Economic Benefits of Island Airport Outweigh Cost to Taxpayers
April 23, 2010
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  • By Anne Esposito

    For many years, there has been controversy surrounding the Hilton Head Island Airport. There are those who thinkthe island should not have an airport. There are those who want to keep it the same. And there are those who envision a future that includes an expanded, modern, commercial airport.

    Debates rage concerning taxes, passenger facility charges, fuel taxes, landing fees, Federal Aviation Administration grants, personal property taxes, airport revenue and the economic impact to the local economy.

    The Hilton Head airport contributes $50 million in direct economic benefit to the Town of Hilton Head Island, as well as an overall impact of $81.8 million a year, according to a 2006 S.C. Department of Commerce study. In comparing the dollars that residents and property owners pay toward the airport to the total economic impact the airport generates, it is clear that the airport generates millions more dollars than taxpayers pay. The airport is a valuable economic resource for the town and Beaufort County.

    The airport produces revenue from pilots and aircraft owners who pay property taxes on aircraft, personally owned hangars, fuel taxes and fees taxed on services. More revenue is derived from taxi fees, car rental fees, parking fees, county-owned hangar fees and fees that are charged to the airlines. Unfortunately, personal property taxes on aircraft and ownership of personal hangars are put into the county’s general fund instead of the airport fund.

    The Hilton Head airport does not charge a passenger facility tax. In order to institute such a tax, an airport must have FAA approval for a capital improvement at the airport, such as a purchase of land or infrastructure supportive of airline requirements, or general improvements on the airport for commercial or general aviation. The facility tax can also be used to pay a 2.5 percent match on grants. Expectations are that a facility tax will be charged in the near future.

    Landing fees are another way to generate income for an airport. Landing fees are collected from the airlines using the airport. General aviation pilots pay taxes on fuel, tie-down fees and services. They are not charged landing fees on their aircraft.

    According to the FAA, the Hilton Head runway is the shortest in the continental U.S. at an airport that provides commercial service. The national minimum standard for airports is 5,000 feet. It must be noted that the turboprop aircraft being used by US Airways and Delta are being phased out. Therefore, it is reasonable to assume that both airlines will purchase regional jets if they are not already in their fleets. No new turboprops have been ordered by either airline. In order to retain commercial service for the future, an extended runway is needed. There have been questions as to who will pay for extending the runway. With an FAA approved master plan, the FAA will pay 95 percent, the state 2.5 percent and the county 2.5percent.

    If the runway is not extended to allow commercial service, and commercial service is lost, the airport will lose its Part 139 certificate, which allows it to function as a commercial airport. The capability of fire and rescue service, the control tower services, much of the FAA funding, revenue connected to commercial service, such as airline fees, taxi fees and parking fees, as well as many local jobs, will be lost. That includes local air traffic controllers. It would take many years to reinstate this certificate, if it could be done at all.

    An airport with commercial service plays a key role in our community by providing an essential transportation link for tourism and recruiting new companies that will provide jobs for the local economy. It also provides a staging ground for recovery from a disaster. As concerned island residents, we must make sure we maintain and upgrade one of our most valuable assets — our airport.

    Anne Esposito, a pilot, is a former airport manager and vice president of airports for the Aircraft Owners and Pilots Association. She was a two-term member of the Beaufort County Aviation Advisory Board and is a member of Citizens to Protect the Hilton Head Island Airport.

    Date: 2010-04-22