WisBusiness: State airlines tout benefits of tax break

By Joanne M. Haas

MADISON — Legislation to secure a property tax exemption for Midwest Express and Air Wisconsin is pending in the Capitol, but it was unknown whether questions surrounding the hastily-introduced measures can be answered before the Legislature adjourns its regular session Thursday.

Representatives from Midwest Express and Air Wisconsin testified before the Joint Finance Committee, first thanking legislators for enacting the $2.5 million annual tax break in 2001, and then detailing how it translated into equipment purchases, more customer services and employment gains.

Midwest Express and Air Wisconsin qualify for the tax break because they operate a terminal hub facility in the state. But Northwest Airlines, which does not operate a hub and is subject to the tax in lieu of local property taxes, contends it deserves fair treatment because it employs more than 1,000, moves nearly 3 million passengers in and out of Wisconsin annually, and could also benefit from the tax break.

In 2001, Northwest challenged the 2001 exemption in Dane County Circuit Court and won. The court ruled the tax break violated the U.S. Constitution’s commerce clause, which says states cannot discriminate against interstate commerce. The decision has been appealed, and no one is sure when the Appeals Court will render a decision. In the meantime, a bipartisan group of legislators has introduced AB933 and SB533 as backups should the previous law fall.

The two new companion bills would create incentive grant payments to any airline that operates a hub terminal facility in the state. Northwest, meanwhile, is arguing the simple approach would be to expand the 2001 property tax exemption to all airlines.

Finance Co-Chair Sen. Alberta Darling, R-River Hills, is one of the lead authors of the measures and says efficient and effective air travel is crucial to the future economic health of Wisconsin. “We don’t want to look like the end of a very long line of travel,” she says.

But Democrat Sen. Russ Decker of Schofield wondered whether the new legislation will simply trigger yet another lawsuit. “We could be going down the same path again,” Decker said.

The committee adjourned Wednesday with the understanding if questions and concerns about the measures could be answered, the committee would reconvene and take a vote.