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Salem leaders commit nearly $2.5 million for airport on a wing & a prayer
Despite their own advisory committee finding the risks outweigh the upside, Salem leaders gamble taxpayer money on aviation envy project.
In July of 2022, the City of Salem’s Aviation Advisory Committee reported to city officials on the status of commercial air service in Salem. The report ultimately indicated more risk than opportunity in funding Salem Airport expansion.
And that’s not the only red flag that Salem political & business leaders might be making a mistake with committing $2.4 million in taxpayer dollars to what appears to be a roll of the dice…and the odds are actually stacked against us.
Why expand & enhance Salem airport? And why now?
In order to attract commercial airline traffic, municipalities have to meet a ton of stringent federal requirements. And, allegedly, there is at least one commercial airline who has indicated they would set up shop at the Salem airport if we make the required investments.
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There’s also grant money available to make transportation improvements in preparation returning commercial air traffic to the Salem Municipal Airport.
Often, as is the case here, grant funding doesn’t cover the full cost. And when all other funding avenues are exhausted, they start getting real interested in the closest municipal general fund. And Salem lawmakers just voted in early January to shell out a few million to help get the airport into shape for commercial service.
The project they’re leaning into, though, has a good chance of failing. And the wild thing is - everyone signing off on this has been told the odds are against this project actually succeeding.
Why is expanding & renovating the Salem airport a good thing?
It’s all about meeting federal aviation requirements for handling commercial air traffic. Improved facilities. Larger staff. More complex support infrastructure.
Making the required improvements and earning commercial air travel contracts would, in theory, mean:
More convenient air travel
Increased accessibility to the area
Regional economic growth
In fact, the City of Salem Airport Advisory Committee submitted a report in late July 2022 that nicely wrapped up the opportunities and risks of this project:
Not only does this list clearly reflect higher risk than opportunity, but there’s another key difference between the opportunities at the top of that page, and the risks at the bottom - the opps are entirely aspirational, the risks are cold fact.
That means the list of 6 opportunities are essentially a series of interconnected hopeful speculations that pretty much all need to prove true for the investment to pay off.
And the list of EIGHT risks are almost all descriptions of reality. Or, as the young folks might tell me not to say…no cap. These 8 risks, though, aren’t interconnected. Anyone of them trending in the wrong direction could sink the viability of the taxpayer investment being made in the airport.
I don’t know about you, but if that’s me? If that’s my money? I’m not making that bet. It doesn’t make sense.
And that’s just the first giant, vibrant red flag on this Salem Airport project.
It’s not clear that this project will ever result in a profitable airport
In a January 2023 staff report from Interim Public Works Director Brian Martin to the Salem Mayor and City Council, officials also indicated these millions of dollars of taxpayer investment are likely to result in continued losses at the Airport.
In their own words, “Estimated annual revenues are expected to be insufficient to cover estimated ongoing annual expenses.” And, the committee explains in their report, the bulk of these additional expenses related to airport service expansion are related to staffing. That means ongoing costs mandated by federal staffing requirements to handle commercial air travel.
You will only need one try to guess who’s going to pick up the tab on this developing boondoggle…(again, quoted right from the report - emphasis added):
“Financial resources will be needed immediately to expedite additional design, procurement, and construction of needed improvements as well as funding of new staff positions. A direct General Fund allocation will be the most immediate resource.”
Still not convinced taxpayers will be on the hook for this project in perpetuity? Here’s Salem public works operations manager Mark Becktel, as reported in the Salem Reporter (emphasis added):
Becktel noted that the improvements would be the bare minimum to meet requirements, and not make for an optimal passenger experience. The airport would likely need more improvements in the future.
Maybe the investment of millions of taxpayer dollars into an aging regional airport is worth it in other ways?
Well, that’s the hope, right? It’s the outcome that local officials are betting on. It’s the Field of Dreams strategy - if we build a better airport, commercial airlines will come, Ray.
But we don’t even have ghosts in a cornfield to help this make sense. In fact, we have a pretty grim forecast for regional commercial air travel.
We covered the very real and lopsidedly heavy list of risks presented to City of Salem lawmakers above. Those risks aren’t unique to Salem - they’re industry-wide trends that are practically screaming at us NOT to move forward with this investment.
The New York Times reported in November 2022 that reliable regional commercial air travel has been decimated by pandemic disruptions and the economics of such airports succeeding face substantial obstacles.
From the NYT article:
Domestic passenger travel demand has come roaring back, but route economics have changed and disproportionately affect regional flights, said Brett Catlin, vice president of network and alliances at Alaska Airlines. The pilot shortage that arose during the pandemic has boosted salaries, especially among regional-carrier pilots, he said, making those flights more expensive to run. Smaller planes are also less efficient. A 500-mile flight in a regional jet that holds an average of 76 passengers uses about 30 percent more fuel per passenger than the typical mainline jet, which carries an average of 159 passengers, said Mr. Catlin.
Scholarly & academic investigation also shows that economic impact or regional commercial air travel is far from certain. This study of European regional airports published in January 2022 in the Journal of Transport Geography found limited economic impact from regional airports, but only if they operated in specific economic conditions to begin with.
Another study published in Transportation Research Procedia in 2017, “Small regional airports operation: unnecessary burdens or key to regional development,” found mixed results when studying economic impact of small, regional airports. It should be noted that two of the three airports they studied consumed more in subsidies than they produced in economic benefit.
Despite a sea of red flags, City of Salem officials determined to push forward
Elected officials in Salem presumably are aware of all of these challenges behind gambling nearly $2.5 million dollars of taxpayer money.
According to reporting from the Salem Reporter, they seem undeterred.
“I’ve been hearing our constituents on both sides of this issue. To me it’s not clear cut. There are positives, there are negatives to whichever decision we make tonight,” (City of Salem Mayor Chris Hoy) said.
Ultimately, Hoy said he thinks the airport will help Salem own its status as the state capital and will make what is a large use of landscape more accessible to the general public.
“I understand the concerns, I’m very committed to reducing greenhouse gas emissions,* and I know that this might not help that. But I know we’re doing a lot of other things that will,” he said. “I think it’s time for Salem to come of age and I think that this is one more step for getting us there.”
Salem Mayor Hoy, of course, represents the allocation of nearly $2.5 million as a tough decision between evenly competing choices. But we already know the risks far outweigh the potential opportunity.
*We’re deliberately not getting into the environmental issue with this article. But it’s laughable, though, that Mayor Hoy would claim to be committed to reducing greenhouse gas while writing a check for $2.4 million that shows he’s actually not committed to anything close to that.
So what gives? Why would the Mayor & City Council unanimously approve this funding to a project almost certain to fail (but not before it costs us significantly more money)?
When you remove the flawed economic argument & the convenience argument from the mix, there seems to be a single valid reason for local business and government support for commercial air service in Salem….ego.
You’ll find it woven into almost every document and statement that argues in support of this airport expansion project - we are one of the only state capitals that doesn’t have commercial air service.
Click through to some of the documents linked to throughout this article. You’ll find this is the only argument that survives scrutiny.
But that’s not the only thing driving this almost-certain-to-fail project
There’s a group called Fly Salem that awards itself the title of being a “collaborative community committee.” Go ahead and look at the membership and see if that description holds true:
Members of Fly Salem - chamber & group leaders, as well as business owners - spoke to the Salem City Council at the January 9, 2023, meeting in favor of their own group and it’s members receiving taxpayer money from the general fund.
They were, however, outnumbered by community members who urged the City Council to consider environmental factors and budget issues.
And, since the City Council decided to give their business and industry friends the $2.4 million - one can only assume the voice of commercial interests counts for more than actual constituents.
It would be great to hear from Salem elected officials why they are choosing to gamble our money with their friends. Especially when the deck is entirely stacked against this project succeeding.
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