State lawmakers say Delta Air Lines might lose large tax breaks in Minnesota, once the Northwest headquarters in Eagan is relocated.
The tax issue came up today during a legislative committee hearing on the impact of Delta's acquisition of Northwest Airlines.
Currently, the airline pays no property taxes and gets a significant subsidy on the cost of jet fuel. After the hearing, Delta General Counsel Ben Hirst said changes in state tax policy could increase operational costs and impact service.
"To the extent that the Minneapolis airport has higher costs per enplanement than Cincinnati or Detroit or other competing airports in the Delta system, then all that happens there is that Delta has an incentive to locate flights through those airports rather than here," said Hirst.
State Rep. Ann Lenczewski, DFL-Bloomington, chair of the House tax committee, says she wants to take a look at all airline tax breaks during the 2009 session. Lenczweski says the loss of the Northwest headquarters makes it hard to continue those benefits.
"When you've been sort of that Minnesota company that's been there through thick and thin, and then you're not, it's okay to take a look at kind of what preferences have you been getting, how many should you still get and how many are not really justifiable anymore," said Lenczweski.