If you were buying a house, would you sign on the bottom line with just an estimate of what the loan was going to cost you? Of course not. But the St. Clair County Board just voted to refinance the MidAmerica Airport bonds, even though board members don’t know exactly what it’s going to cost. The bond pricing got delayed because of Illinois’ financial woes. Too bad the County Board didn’t push off its decision, also.
Guess when you’re talking millions of dollars, what’s a few hundred thousand one way or the other, right? That’s nothing compared to the overall cost. The refinancing is going to cost the taxpayers of St. Clair County an estimated $88 million over 30 years, or more than double the $39.85 million that’s owed on the existing bonds (the county has more than that in its reserve fund). Instead of the bonds being paid off in 2029, it’ll now be 2045.
One supposed benefit is that this smooths out payments and avoids a big balloon payment in 2029. But that’s cold comfort for next year. With the current bonds, the principal owed in 2016 is $150,000; the new payment presumably will be many times greater than that. The airport had a net operating loss of $12.9 million in 2013. How much will the losses increase with the costs of this refinancing?
All this begs the question: What is St. Clair County going to do with MidAmerica Airport? Is anyone even talking about turning it over to the Department of Defense or closing it down? The plan seems to be to keep going in the hope that some day, the airport will get used more. But after years of trying to get the airport off the ground without success, there’s no reason to think that. We thought it was a good idea to build the airport, but it’s a terrible idea to keep losing millions of dollars year after year. Restructuring the bonds doesn’t solve anything, it just gets the taxpayers deeper in debt.
Thanks to the board members who voted against the new bonds: Fred Boch, Ed Cockrell, Frank Heiligenstein, Craig Hubbard, Nicholas Miller, Michael O’Donnell, Steve Reeb and C. David Tiedemann. If your board member isn’t on the list, call him or her and ask: What in the world are you thinking?