Tax hike on stored planes rejected

Wednesday, December 15, 2004
Tax hike on stored planes rejected
INLAND: San Bernardino International Airport can proceed with an aircraft storage contract.
The Riverside (CA) Press-Enterprise

Operators of the San Bernardino International Airport and other former military bases in the state dodged an expensive tax charge that would have killed a source of income for the airports. The state Board of Equalization voted down a proposal that would have drastically increased the property taxes assessed on planes stored in California.

The 5-0 decision clears the way for San Bernardino International Airport to proceed with an aircraft storage and maintenance contract that could eventually raise as much as $500,000 a year for the former Norton Air Force Base, said Don Rogers, interim executive director for the San Bernardino International Airport Authority.

That contract, which starts at about $300,000 a year, could eventually equal about a third of the airport authority’s budget.

The contract was on hold pending a decision on the proposed rule change, which, opponents said, would have pushed aircraft-holding companies to move aircraft out of state.

“This is very good news for us,” Rogers said Tuesday afternoon. “This means we will be able to bring those aircraft in here.”

He said the new contract should create 100 jobs to maintain about 50 planes. Rogers said the planes could start arriving as early as Jan. 1.

Bill Leonard Sr., an area businessman who handles many of the airport’s real-estate dealings, made a presentation in Sacramento earlier in the day. His son, Bill Leonard Jr., is a member of the state board.

County tax assessors from around the state had asked the Board of Equalization to remove a tax exemption for aircraft being repaired, modified or serviced in California. They argued that the law should not apply to planes that receive only minor maintenance in the course of being stored here.

But such a move would eliminate hundreds of aircraft-maintenance jobs because the planes would be shifted to Arizona and elsewhere, said John White, vice president of Southern California Aviation, a maintenance firm in Victorville. He also made a presentation in Sacramento Tuesday.

“The idea of taxing these planes is ludicrous,” said White, whose company employs about 200 people. “The planes would just fly away and leave, and so would the jobs.”