Musto and Baker Seek Taxpayer Protections in Any Cargo Airport Deal

HARRISBURG, June 25, 2008 — Taking action on recommendations issued in an independent, non-partisan study, State Senators Raphael J. Musto (D-Luzerne) and Lisa Baker (R-Luzerne), have introduced legislation (Senate Bill 1509) that would protect taxpayers and impose standards that must be met before the Commonwealth can participate in the development of any cargo airport construction project.

“This legislation puts taxpayer protection in front of a developer’s escape route, ensuring that the risks and rewards are clear and shared,” Musto said. “This legislation protects working families from being stuck with the bill.”

Baker added, “With so many questions and concerns about this proposal, we should be cautious about any commitment of taxpayer dollars. With the developer shopping for a huge amount of public money, and a report now issued indicating a fairly high level of risk, the need for clear and effective taxpayer protections is clear. And they must be in place before the first state dollar is pledged.”

Baker and Musto co-authored and worked to pass Senate Resolution 144, which authorized LBFC—a bipartisan, joint committee of Senate and House members—to study the Hazleton project and report back its findings.

The proposed airport would be located in the Hazleton area on 1,000 acres of land south of the Humboldt Industrial Park that sits astride Schuylkill, Carbon and Luzerne Counties. The cost of the project is estimated at $505 million. The state has been asked to contribute $250 million.

Introduced as the “Cargo Airport Funding Act,” the Musto/Baker measure would require:

  • approval of the project by the state Department of Department of Transportation;

  • certification that the developer has invested a minimum of $250 million in private funds or half of the total project cost, whichever is greater;

  • a commitment from one or more integrated air cargo carriers that will serve as an anchor tenant;

  • a guarantee that the airport will have a designated level of activity;

  • the securing of all state and local permits; and

  • an agreement with each county, municipality or school district where the project is located providing for financial offsets to pay for increased local costs.

Musto said that while the project promises thousands of new jobs, “we shouldn’t jump at it without a real understanding of the costs and the impact.”

The study found that the airport’s impact on the local community would be mixed, including an overflow of students to already crowded local schools.

The LBFC study concluded that the proposed airport could be successful if it followed the development track of select group of cargo-only airports. The study emphasized that no all-cargo airport has been successfully developed without a major anchor carrier such as FedEX, UPS or DHL. The study also found that these integrated carriers are unlikely to move to the proposed Luzerne County facility.

Musto and Baker said that they hoped the legislation that puts the benchmarks in place would be considered this fall.

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