Aircraft tax rate could be reduced

Regional airport stands to benefit from development

By James Heffernan -- jheffernan@nvdaily.com

WINCHESTER -- Frederick County may be willing to forgo more than $100,000 in tax revenue next year to make the Winchester Regional Airport more attractive to development.

The county finance committee last week recommended the Board of Supervisors reduce the personal property tax rate on aircraft housed at the facility to 1 cent per $100 of assessed value to bring it in line with airports in Leesburg, Manassas and Warrenton. Winchester's rate is currently 42.5 cents per $100.

Earlier this year, the county dropped the rate to 1 cent per $100 on planes weighing more than 20,000 pounds after ProJet Aviation moved two of its executive jets to Leesburg. The latest proposal would apply to all aircraft regardless of weight.

In fiscal 2010, revenue from the 111 aircraft parked at Winchester Regional Airport totaled $107,646, according to county Commissioner of Revenue Ellen Murphy. Reducing the rate to 1 cent per $100 would take that figure down to $2,530.

County Administrator John R. Riley Jr. indicated at the meeting that the county should be able to cover the lost revenue when the fiscal 2012 budget process begins in the spring.

A lower rate would help spur economic development near the airport, according to Executive Director Serena "Renny" Manuel.

"We hope to be able to use it as marketing tool" to develop land owned by the airport authority adjacent to the Public Safety Building, she said.

"But to build a hangar and a ramp, you first have to build some of the infrastructure," Manuel said. "That's in our 20-year master plan, but it's not cheap."

The authority, which gets stipends from the city and the county to add to receipts from fuel sales, could borrow the money to build a hangar, she said, "but then you have to be able to pay the debt service, whereas if we can strike a land-lease deal [with a corporation], we make money and then at the end of the term the hangar reverts back to the authority."

Even if future development did not occur, she said, the higher tax rate could drive away some of the larger aircraft at the airport, which in turn would hurt fuel sales.

"If we start losing the jet burners or are unable to attract replacements due to our tax rate, we will have a higher deficit for the city and the county [to help cover]," she said.

Shawnee District Supervisor Gene Fisher, a member of the airport authority, said the county faces a difficult choice, but lowering the rate would send a "message to the business community that we're open for business, that we want to attract companies to this area, whether or not they have strong ties to the airport."

Fisher said he knows of at least one or two additional planes that may be forced to leave the airport if the rate remains unchanged.

"Of course, there's nothing we can do for this fiscal year, but I certainly hope they will stay," he said.