Sunday, May 14, 2017

Pilots, leaders up in air over plane tax hike proposal: Danville Regional Airport (KDAN), Virginia



Danville City Council will decide whether to more than double the city’s airplane tax during its meeting Tuesday night.

Raising the tax on aircraft from 30 cents per $100 of assessed value to as high as 70 cents is on the table, along with other proposed tax increases including those for real estate, personal property, meals and lodging.

Mayor John Gilstrap opposes raising the rate far out of proportion to the increase proposed for personal property — which could go from $3 to $3.50 per $100 of assessed value.

“I would support not increasing it at all, but I could support a small increase not to exceed 40 cents,” Gilstrap said, adding that he will not support the 70-cent proposal.

Danville Transportation Director Marc Adelman said he was asked by city officials to research airplane tax rates in other localities and to provide a recommendation to the Danville Regional Airport Commission. Adelman recommended a rate not to exceed 70 cents in order to remain competitive with small airports in North Carolina.

Danville Regional Airport has about 40-42 aircraft, including seven from Averett University — which is exempt from the tax, Adelman said. There are about 35 taxable aircraft at the airport in a given year, Adelman said.

More than 40 percent of the aircraft there are owned by people from outside Virginia, and more than 20 percent of owners are from North Carolina, Adelman said.

“We have to be competitive with North Carolina airports because their [North Carolina’s] aircraft owners are traveling to base their airplanes here,” Adelman said.

City Councilman Fred Shanks initially proposed raising the rate to 90 cents during a work session to find other sources of revenue to offset a proposed increase in the real estate tax rate.

When contacted by the Danville Register & Bee on Sunday, Shanks said he was not trying to raise the rate to 90 cents, but was try to bring it up to par with other localities. Also, he sought guidance from staff to find a reasonable rate, he said.

Shanks said he is not in favor of tax increases, but if the city is going to raise taxes on real estate, personal property, meals and lodging, then the rate charged for airplanes should be in line with other localities.

The current 30-cent rate on airplanes is unfair when the personal property tax rates for vehicles would be $3.50 per $100 of assessed value — the rate proposed for 2017-18, Shanks said.

“If you own a $25,000 pickup truck, you’re going to pay $3.50,” Shanks said. “But the guy with a $25,000 airplane is only paying 30 cents. That’s just way out of whack.”

At least two pilots who store their planes at Danville Regional Airport oppose the tax increase on aircraft.

John D. Smith III, a Rockingham County, North Carolina, resident who has kept his Cessna Citation jet at the airport for eight years, said he would move his aircraft to Rockingham County if the tax were to increase to 90 cents and his hangar rent were to go up.

“I sincerely hope that the Danville City Council will reconsider the proposed price increases before finalizing them,” Smith wrote in a letter to Danville City Councilman Lee Vogler.

Smith pays $8,580 per year for hangar rent and $3,120 a year in personal property tax for his aircraft, for a total of $11,700.

He was one of the founders of the Rockingham County Airport at Shiloh and the chairman of the airport authority there for about 10 years.

“However, I chose to hangar my aircraft in Danville because of its reasonable tax rate,” Smith wrote in the letter.

Jason Payne, who has stored his Pilatus plane at the Danville airport for four years, said he hopes Danville City Council will work out the tax rate. Payne said he paid about $25,000 in tax and for the hangar and light bill last year.

If the city raises the tax rate too much, Payne said he could build a runway and hangar on his property for about $32,000. Another option would be to register his aircraft in Delaware and pay no tax, he said.

“That hangar was vacant for nine years before I came there [at the Danville airport],” Payne said.

City Manager Ken Larking said all the hangars at the airport are booked and there is a waiting list for them, “so they’ll be quickly filled.”

A 90-cent increase would generate $30,000 in revenue a year, while 70 cents would bring in more than $20,000, Larking said.

Vogler said he opposes both the 90-cent and 70-cent rates.

“Even at the 70 per $100 increased rate … it represents the largest percentage tax increase in the entire budget, more than doubling the current rate,” Vogler said.

Also, it would bring in very little additional revenue, while more than likely costing money “through lost tax revenues and hangar fees when owners take their airplanes to other nearby airports,” Vogler said.

If council can’t find the money to save somewhere in the budget, “then we’re not doing our jobs. I will be voting against this tax increase,” Vogler said.

Original article can be found here:   http://www.godanriver.com

1 comment:

Jim B said...

KPVG at Hampton Roads Executive is under the City of Chesapeake, a similar non-towered airport to Danville. The rate at KPVG is $0.58 per $100 eval which is much more reasonable.