A windfall for airports could mean a loss to Illinois municipalities as legislators determine the fate of millions of dollars in jet fuel taxes.
At issue is how the General Assembly will divvy up about $20 million a year in aviation fuel taxes and how the jackpot can be used.
Typically, when planes gas up at airports, the owner pays 6.25 percent in sales taxes. The state gets 5 percent and the remaining 1.25 percent eventually goes back to municipalities with airports. And many of those municipalities use the jet fuel taxes for general purposes.
But in 1987, the Federal Aviation Administration ordered that tax revenues from jet fuel be used for airports, not swept into state or municipal funds.
That rule largely was ignored until 2014, when a compliance date of Dec. 8 was set; Illinois missed that deadline but will likely conform by spring, lawmakers said.
The state’s 5 percent share of the sales tax is grandfathered in since it predates the 1987 FAA rule. However, the change is “going to cost municipalities that have been using the money for their municipal fund,” said state Rep. David Harris.
For example, Wheeling, where Chicago Executive Airport is located, could lose about $150,000 a year, and “that’s not chump change,” added the Arlington Heights Republican.
Village Manager Jon A. Sfondilis called it an unfortunate “example of a municipality losing direct revenue used to pay for core services.”
As to what the money can be used for going forward, in general, revenues are intended for airport-related purposes, the FAA said.
Pending legislation in Springfield would require the funds to be spent on airport capital projects or operating costs everywhere except Chicago.
In Chicago, the revenues would be restricted to replacing windows installed as part of a soundproofing program near Midway and O’Hare international airports or testing air quality, state Rep. Michael Zalewski said. The move is related to reports of a foul smell caused by windows installed in homes near Midway to mitigate jet noise.
Given complaints of noxious odors, “it makes sense to address those concerns as expeditiously as we can,” said Zalewski, a Chicago Democrat and chairman of the Revenue and Finance Committee. He noted that the legislation could be updated once new windows are completed.
The legislation also calls for the tax revenues to be distributed based on enplanements (or people boarding aircraft) which would give the lion’s share to Chicago. However, because of pushback from lawmakers and government officials, it’s more likely to be based on Illinois Department of Transportation funding formulas, Zalewski said.
Harris noted, “I would like to see a straightforward distribution where taxes that are paid (at an airport) go to that airport.”
Neither the Chicago Department of Aviation nor United or American airlines weighed in on the question, although all indications are carriers would like the tax to disappear.
A final resolution is expected when the General Assembly gets back to work in mid-January.
Lawmakers will “continue to work to put forth a statutory fix to come into compliance with the federal rule,” Zalewski said.
Got an opinion on this or other transportation issues? Send an email to firstname.lastname@example.org. This week I’m interested in pedestrian experiences at crosswalks. Did drivers stop or not?
You should know
Illinois Tollway Director Neli Vasquez Rowland is jumping into the crowded congressional primary race to replace outgoing 4th District U.S. Rep. Luis Gutierrez of Chicago. Rowland, of Bartlett, is president of A Safe Haven, a nonprofit that aids people suffering from addiction. She’s up against 10 other candidates in the March 20 Democratic primary.
Want to learn more about improvements to the underwhelming interchange of the Reagan Memorial Tollway (I-88) and Route 47 near Sugar Grove? IDOT’s got a forum from 4 to 7 p.m. Thursday at Waubonsee Community College’s Academic and Professional Center in Sugar Grove, where you can hang with engineers and peruse maps.
Lake Shore Drive and I-55 fix
The great crawl is over. After months of slowdowns at the interchange of I-55 and Lake Shore Drive near McCormick Place, a massive redo is complete. The $135 million project included rebuilding six elevated bridges connecting the two roads and involved IDOT, the city of Chicago and McCormick Place.