The Airlines & the Jail

Everybody knows that the county jail is full. Another referendum this fall, same as two years ago, will ask voters to approve a 1/2-cent hike in the local sales tax–a “public safety” tax–to fund expansions to jail-related programs and services.

What’s plain is that the decision had to be made about whether we are going to house our own prisoners or transport them to facilities in other counties, and the county board has made it. What maybe hasn’t been so plain is how they came up with the number they’re asking for, and how two airlines fit into the tax picture–in a big way.

The county currently takes in $4 million in sales taxes yearly at the current rate of 1/4 of one cent. The tax increase, if passed, would be expected to bring in an additional $8 million, but only if everyone agrees to pay it and the two Sycamore-based subsidiaries of American Airlines and United Airlines have stated that they will leave the area if they can’t obtain exemptions from any increase.

Such exemptions cut the projected revenues exactly in half, which is why asking for 1/4-cent instead of 1/2-cent wouldn’t work. Phase I jail operating expense projections come to about $4.4 million so for all intents and purposes it’s a balanced budget with the 1/2-cent increase and without airline participation in that increase.

It is clear from the minutes of the July 10 joint meeting of the Finance and the Law & Justice committees of the DeKalb County Board that both businesses, American Aviation Supply and United Aviation Fuel Corporation, will enter three-way agreements with the county and with Sycamore to freeze what they pay to the county at the current rate even if the referendum should pass. Sycamore already enjoys guaranteed sales tax revenues of $360,000 per year from each of these firms (also see here). Order acceptance centers for the airlines’ fuel purchasing operations, they are small offices that require very little in the way of city services. Sweet. Even more stunningly, of the $4 million in sales tax that the county annually takes in, fully half comes from these airlines.

That’s right, if the airlines leave Sycamore it would be a loss of $2 million per year to the county coffers. In effect they’re pretty much funding the current jail operations.

I would like to thank County Board member Pat Vary and Deputy County Administrator Gary Hanson for helping me get my facts straight for this story.