Plane owners jumping ship?

Soldotna man tells Kenai council taxes driving pilots away

Posted: Tuesday, November 05, 2002

Private plane owners came back for round two of a debate with the Kenai City Council about personal property tax exemptions.

David Wartinbee, a private plane owner from Soldotna, returned to discuss the matter further at the council's Oct. 16 meeting after first bringing the issue up in a September meeting.

Wartinbee is protesting the 3.5 mills of tax the city levies on personal property. This includes aircrafts tied-down at the airport but is not limited to just planes. Boats, automobiles and all personal property used in a business, like tractors or snow plows, also are taxed.

The Kenai Peninsula Borough and the cities of Soldotna and Homer also tax personal property, but exempt $100,000 from the tax. For instance, a Homer person who owns a boat valued at less than $100,000 would not have to pay property tax on it, whereas if the owner had that boat in Kenai, they would. Personal property valued at more than $100,000 is taxed throughout the borough.

In the September meeting, Wartinbee told the council he and other pilots he's spoken to have moved their planes from Kenai to the Soldotna Municipal Airport to avoid paying the tax. He said the tax is driving pilots away and negatively affecting airport businesses, so it should be reduced or repealed.

Council members gave a varied response. Kenai Mayor John Williams questioned whether pilots really were leaving because of the tax, and said people should be willing to pay for the quality services and facilities the airport provides. The council said it would consider the matter further in its upcoming budget work sessions.

In the Oct. 16 discussion, Wartin-bee was joined by Chip Versaw of Soldotna, owner of the Alaska Flying Network, a flight school operating at the Kenai airport. He, too, argued the tax is is a hindrance.

Versaw would like to expand his business, but there has to be a solid base of aircrafts at the airport for him to do, he said.

"Soldotna has been aggressively soliciting aviation businesses," he said. "Kenai is so sadly underused it is pathetic. ... This added cost (from the tax) puts my airplane business at a significant disadvantage to businesses in Soldotna."

In the past, Williams and other council members have responded to the charge that it is unfair to tax in Kenai when other cities don't by saying the Kenai airport offers superior services and facilities than other airports on the peninsula, and that airport users should pay extra for those services.

"Is there no value in the Kenai airport?" council member Duane Bannock asked Versaw during the Oct. 16 meeting. "Is there not $200 value? If you want to talk about a level playing field, then we need to look at the big picture. We offer more services dollar for dollar than any other airport around."

Williams further argued that, compared to insurance costs aircraft owners are required to pay, the amount of property tax the city charges isn't that expensive.

"These do not seem to be an inordinate amount of tax dollars on a recreational vehicle," he said.

Versaw disagreed.

"Maybe you don't think so, but some other people do," he said. "Why is the Soldotna airport growing by leaps and bounds? There's got to be some reason. When I talk to other pilots I ask them why (they leave Kenai), and that's what they told me."

Williams challenged the validity of the assumption that pilots were leaving because of the tax, or that a significant amount were leaving at all.

Larry Semmens, finance director for the city, had prepared a report about the property tax on aircrafts for the meeting. In it were details on aircraft accounts at the Kenai airport in 2001 and 1998, aircraft accounts opened at the airport since 1998 and aircraft accounts closed since 1998.

From the report, Williams pointed out that from 1998 to 2001, 25 aircrafts with an average tax value of $59 left the Kenai airport. By 2001, 29 new aircrafts had come to the airport with an average tax value of $180.

Wartinbee was not swayed by the report.

"I think arguing those numbers is really a waste of our time," he said. "I think they're misleading."

According to Steve Bonebrake, public works director for the city of Soldotna, the number of planes tying down at the Soldotna airport has risen.

"We have had a definite marked increase in participation in our airport," he said.

Bonebrake said he has heard that some aviators have moved their planes from Kenai to Soldotna to avoid paying the tax, but he said those comments were "pretty rare." He did not attribute the rise in airport activity solely to the tax issue.

"I have heard that, but we haven't had a tremendous amount of Kenai planes coming from Kenai to Soldotna," he said. "There doesn't seem to be a mass exodus out to Soldotna."

Bonebrake said the increase has happened a little at a time.

"I think this is just a general increase in the aviation industry," Bonebrake said. "(Plane owners) like what we're doing out there, like our policies and procedure -- that's the general indication we get from them. We definitely want to encourage growth out there, but done in a systematic and responsible way."

Wartinbee said he's talked to a significant enough number of pilots who have relocated their planes to Soldotna to not disregard their complaints.

"I think this has been an experiment over a period of three years, and I think the experiment has shown airplanes have left," he said. "I think it's a disservice to the airplane owners who go away, (and) I think it's a disservice to business owners. It's time to try the experiment the other way."

Though no resolution was reached in the September or the Oct. 16 meeting, council members Linda Swarner and Pat Porter said the issue warranted serious consideration in upcoming council budget work sessions.

"It's obviously an issue you're concerned with," Porter told Wartinbee and Versaw. "I don't know where it's going to go -- I'm only one person. We're beginning to hear more and more about this. We're to the point now where we're going to address this one way or another."

HEAD:Plane owners jumping ship?

HEAD:Soldotna man tells Kenai council taxes driving pilots away

BYLINE1:By JENNY NEYMAN

BYLINE2:Peninsula Clarion

Private plane owners came back for round two of a debate with the Kenai City Council about personal property tax exemptions.

David Wartinbee, a private plane owner from Soldotna, returned to discuss the matter further at the council's Oct. 16 meeting after first bringing the issue up in a September meeting.

Wartinbee is protesting the 3.5 mills of tax the city levies on personal property. This includes aircrafts tied-down at the airport but is not limited to just planes. Boats, automobiles and all personal property used in a business, like tractors or snow plows, also are taxed.

The Kenai Peninsula Borough and the cities of Soldotna and Homer also tax personal property, but exempt $100,000 from the tax. For instance, a Homer person who owns a boat valued at less than $100,000 would not have to pay property tax on it, whereas if the owner had that boat in Kenai, they would. Personal property valued at more than $100,000 is taxed throughout the borough.

In the September meeting, Wartinbee told the council he and other pilots he's spoken to have moved their planes from Kenai to the Soldotna Municipal Airport to avoid paying the tax. He said the tax is driving pilots away and negatively affecting airport businesses, so it should be reduced or repealed.

Council members gave a varied response. Kenai Mayor John Williams questioned whether pilots really were leaving because of the tax, and said people should be willing to pay for the quality services and facilities the airport provides. The council said it would consider the matter further in its upcoming budget work sessions.

In the Oct. 16 discussion, Wartin-bee was joined by Chip Versaw of Soldotna, owner of the Alaska Flying Network, a flight school operating at the Kenai airport. He, too, argued the tax is is a hindrance.

Versaw would like to expand his business, but there has to be a solid base of aircrafts at the airport for him to do, he said.

"Soldotna has been aggressively soliciting aviation businesses," he said. "Kenai is so sadly underused it is pathetic. ... This added cost (from the tax) puts my airplane business at a significant disadvantage to businesses in Soldotna."

In the past, Williams and other council members have responded to the charge that it is unfair to tax in Kenai when other cities don't by saying the Kenai airport offers superior services and facilities than other airports on the peninsula, and that airport users should pay extra for those services.

"Is there no value in the Kenai airport?" council member Duane Bannock asked Versaw during the Oct. 16 meeting. "Is there not $200 value? If you want to talk about a level playing field, then we need to look at the big picture. We offer more services dollar for dollar than any other airport around."

Williams further argued that, compared to insurance costs aircraft owners are required to pay, the amount of property tax the city charges isn't that expensive.

"These do not seem to be an inordinate amount of tax dollars on a recreational vehicle," he said.

Versaw disagreed.

"Maybe you don't think so, but some other people do," he said. "Why is the Soldotna airport growing by leaps and bounds? There's got to be some reason. When I talk to other pilots I ask them why (they leave Kenai), and that's what they told me."

Williams challenged the validity of the assumption that pilots were leaving because of the tax, or that a significant amount were leaving at all.

Larry Semmens, finance director for the city, had prepared a report about the property tax on aircrafts for the meeting. In it were details on aircraft accounts at the Kenai airport in 2001 and 1998, aircraft accounts opened at the airport since 1998 and aircraft accounts closed since 1998.

From the report, Williams pointed out that from 1998 to 2001, 25 aircrafts with an average tax value of $59 left the Kenai airport. By 2001, 29 new aircrafts had come to the airport with an average tax value of $180.

Wartinbee was not swayed by the report.

"I think arguing those numbers is really a waste of our time," he said. "I think they're misleading."

According to Steve Bonebrake, public works director for the city of Soldotna, the number of planes tying down at the Soldotna airport has risen.

"We have had a definite marked increase in participation in our airport," he said.

Bonebrake said he has heard that some aviators have moved their planes from Kenai to Soldotna to avoid paying the tax, but he said those comments were "pretty rare." He did not attribute the rise in airport activity solely to the tax issue.

"I have heard that, but we haven't had a tremendous amount of Kenai planes coming from Kenai to Soldotna," he said. "There doesn't seem to be a mass exodus out to Soldotna."

Bonebrake said the increase has happened a little at a time.

"I think this is just a general increase in the aviation industry," Bonebrake said. "(Plane owners) like what we're doing out there, like our policies and procedure -- that's the general indication we get from them. We definitely want to encourage growth out there, but done in a systematic and responsible way."

Wartinbee said he's talked to a significant enough number of pilots who have relocated their planes to Soldotna to not disregard their complaints.

"I think this has been an experiment over a period of three years, and I think the experiment has shown airplanes have left," he said. "I think it's a disservice to the airplane owners who go away, (and) I think it's a disservice to business owners. It's time to try the experiment the other way."

Though no resolution was reached in the September or the Oct. 16 meeting, council members Linda Swarner and Pat Porter said the issue warranted serious consideration in upcoming council budget work sessions.

"It's obviously an issue you're concerned with," Porter told Wartinbee and Versaw. "I don't know where it's going to go -- I'm only one person. We're beginning to hear more and more about this. We're to the point now where we're going to address this one way or another."



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