Agenda - 12-15-1987 - Laserfiche WebLink

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lagAS-27.1 Overview of the State Aid to Airports Program in North Carolina (12-15-87) State Aid to Airports was initially established by the General Assembly in 1967 with an annual appropriation of $125,000. Under the initial program, airports which had scheduled commercial airline service were not eligible to receive state funds. The primary thrust of the program was the provision of lighting systems and navigational aids for general aviation airports to assist them in attracting aviation-oriented industrial development. This economic development thrust of the program resulted in it being administered through the Department of Conservation and Development's Commerce and Industry section. Because of the limited amount of funds available, a typical year's allocations assisted less than a half-dozen airports. In 1969, the annual appropriation was increased to $150,000. In 1973, North Carolina state government underwent a reorganization in which the more than 200 independent departments, boards, and commissions were consolidated into a limited number of functional departments with broad responsibilities. Under reorganization, the aviation function was transferred to the new Department of Transportation and housed within a multi-modal planning and operations division. Since that time, the aviation function, now known as the Division of Aviation, has remained in the Department of Transportation. Also in 1973, the General Assembly revamped the State Aid to Airports Program by dramatically increasing the state funds available. In FY 1974, $1 million was made available for grants to general aviation airports. Also in FY 1974, state assistance was authorized for the first time to airline service airports, also with $1 million authorized. In FY 1975, the General Assembly dropped the distinction between airline and general aviation airports and all airports were eligible for allocations from a single fund which totaled $3 million. From that time through FY 87, allocations were made from the state general fund with annual totals ranging from $700,000 to $3.5 million. The 1987 session of the General Assembly passed landmark legislation for State Aid to Airports which ties the amount of annual allocations to state taxes paid by aviation users. Each aviation user has been subject to a range of state sales and excise taxes including sales tax on aircraft sales, aviation fuels, lubricants, and accessories; use taxes on aircraft rentals; and franchise taxes levied against aviation businesses. Under the newly adopted Continuing Aviation Funding Program, the estimated revenues from these taxes are appropriated for use by the Department of Transportation for State Aid to Airports and related aviation operation and administrative programs. For FY 1988, a minimum of $5.025 million has been committed and it is expected that future years' programs will grow with aviation activity. Since its inception, State Aid to Airports has operated with three major requirements: (1) Grants may be made only to governmental units and may only be used on airports owned by and open to the general public. (2) Except for certain safety and operation programs undertaken by the Department of Transportation, all grants require a degree of local participation: 50% local for existing airports; 20% local for the initial construction of designated new airports. If federal aid funds have been