Winston-Salem council resists move to de-annex airport

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Derwin Montgomery (left) and Allen Joines
Derwin Montgomery (left) and Allen Joines

by Jordan Green

Members of Winston-Salem City Council are pushing back against a proposal by Forsyth County Commissioner Ted Kaplan to de-annex Smith Reynolds Airport.

A proposal to de-annex Smith Reynolds Airport from the city of Winston-Salem has drawn sharp objections from city council.

“To do something like this and then show such disrespect for the people who live in the area — to me, we’re humans in that area,” said Mayor Pro Tem Vivian Burke, who represents the Northwest Ward where the airport is located. “We have all the rights and privileges of humans. And it’s just been so disrespectful to hear, whether this becomes a reality or not.”

Her comments came during a council meeting to preview the city’s upcoming annual budget on Monday evening.

The change would require action by the Republican-controlled General Assembly in Raleigh, with which the Democrat-led city council has periodically butted heads. But the proposal comes from an unexpected source: Ted Kaplan, a Democrat who was elected at large last November to the Forsyth County Commission.

“Our Smith Reynolds Airport, one of its largest competitors is the Piedmont Triad International Airport when it comes to private pilots and corporate jets,” Kaplan said. “By state law, Greensboro cannot annex the property that the airport owns. It gives them a tax advantage over Smith Reynolds Airport because obviously the only taxes they pay are county property taxes, while the airport in Winston-Salem pays county and city taxes. This is an effort to point out the inequity and to figure out if there’s a way to level the playing field.”

Kaplan said he’s heard the argument that his proposal is an effort to incentivize wealthy individuals to park their corporate jets at Smith Reynolds Airport, but he said it’s more accurate to characterize them as “hobbyists with single-engine planes.”

“When you get down to where they’re going to put these planes, things they look for are fuel costs, the cost of renting a hangar and security,” he said. “Winston and Greensboro compete on all those levels, except Greensboro has a tax advantage. It’s the reason why HondaJet and Timco have expanded at PTI.”

Unlike Piedmont Triad International Airport, Raleigh-Durham International Airport and Charlotte Douglas Airport, Smith Reynolds does not run commercial flights. One of the Winston-Salem airport’s largest tenants is North State Aviation, which installs in-flight entertainment systems and puts other finishing touches on Boeing 737 planes that have just rolled off the assembly line.

“We need to sit down like family do and we need to have a conversation with those people who are I’d say delving out our properties and assets without any conversation from this group or the citizens of Winston-Salem,” said Councilwoman Denise D. Adams, who echoed Burke’s sentiments, along with fellow council members Derwin Montgomery and James Taylor. Councilman Dan Besse, who campaigned for Kaplan last year, made a withering appraisal of the de-annexation plan.

“This was a wild-card proposal that should never have even been drawn,” Besse said, “and hopefully will go back in the deck.”

Ted Kaplan
Ted Kaplan

De-annexing the airport, which is surrounded on all sides by residential neighborhoods, would strip the city of $294,000 in annual tax revenue, according to the city’s budget office. The figure was presented as part of a battery of actual and potential revenue losses resulting from state legislation. The city has already forfeited $6.8 million from loss of reimbursements from the state for repeal of local taxes, an exclusion of proprietary software from the property-tax base and the repeal of privilege-license fees. Along with the proposal to de-annex the airport, the city also faces an additional revenue loss of $2.3 million from proposed legislation to change sales tax distribution from point of sale to per capita.

“I think that’s based at its root on a lack of understanding by a number of legislators from other parts of the state about how important it is for the cities that are driving the increase in our economy to be able to pay for the infrastructure and the public-safety services necessary to keep that growth coming,” Besse said. “Even if your narrow vision is [asking] how can a particular district’s constituents benefit and that district does not include much urban area, you are selling those constituents short in the long run by cutting off the basis of growth that is going to give them potential jobs and increased quality of life. And too many of our legislators don’t understand that, and they need continued remedial education.”

The city could give market pay adjustment raises to employees; replace 35 police vehicles; hire three additional safety and training fire captains; replace vehicles in the transportation, facility management and sanitation departments; and provide additional training for police officers with $2.3 million, either from the restoration of privilege-license fees or retention of current sales-tax revenue, according to information compiled by the city.

The $294,000 the city collects in property tax is not the only thing at stake with the proposed airport de-annexation, Besse said.

“It’s numerically significant, in addition to the stormwater management fees that we collect,” Besse said. “People in Councilwoman Burke’s ward get flooded out because of water draining off the runways. We’d lose those fees, too.”

There are significant disagreements about details surrounding the city’s relationship with the airport.

“If you’re not a part of the city, you don’t get city’s fire protection,” Councilman Montgomery said. “You don’t get the services that are a part of being in the city. And so if that’s a price that the individual is willing to pay, then I think that’s something that needs to be shared with the individuals on the other side as well.”

Kaplan countered in an interview: “The things that cities offer airports are not the same as what cities offer any other corporate entity that benefits from city-provided fire and police protection. These airports have their own fire protection and snow removal. Smith Reynolds Airport has the county sheriff.”

Kaplan argued that the county holds a direct interest in helping the airport become more competitive.

“Even though the airport is an independent organization, it’s still owned by the county,” he said. “If [the airport] has financial travails, it will be the county that will have to step up.”

Commissioner Don Martin, Kaplan’s colleague on the Forsyth County Commission, has suggested that the county might consider replacing some of the revenue lost by the city. But, as North Carolina cities experience of barrage of assaults to their revenue from the Republican-controlled General Assembly, a move to de-annex the airport holds an ominous portent to city leaders like Besse.

“Even if there were a way for the city and county to fully agree on ways to replace the revenue, it doesn’t address the horrible precedent that this sets,” Besse said. “Any business in the city could say, ‘De-annex us and we’ll be able to afford more economic development, and then we’ll bicker over what we pay for the services we receive.’ That would create chaos and pass on higher costs to the citizens who don’t have someone to champion their cause and carve our a special deal for them.”

Council members are bracing for legislation to potentially be filed by Wednesday, the cutoff date for local bills. But that may not happen. Rep. Debra Conrad, a Republican lawmaker from Forsyth County, acknowledged Monday night that she had drafted a de-annexation bill in anticipation of the deadline, but said she was not sure she would file it. She added that she was waiting for some information she requested from the local airport commission and gauging whether the county commissioners want her to proceed.

“Unless I get the clarification and documentation I have requested from the county,” she said, “I will not file.”

Sen. Joyce Krawiec, the sole Republican from the Forsyth County delegation in the Senate, said she has no intentions to file a bill to de-annex the airport.

“I was asked to consider such legislation by an elected official,” she said in an email. “I spoke with city officials and determined it would not be in the best interest of the city.”

At this stage, county and city officials are moving into negotiation mode.

Mayor Allen Joines said he’s had fruitful discussions with individual county commissioners, and is putting together a more formal meeting.

Kaplan indicated he’s willing to look for a compromise.

“I think all of us are trying to create a solution to the problem,” the county commissioner said. “I don’ think anybody’s headstrong about moving ahead. I think we all agree that consensus is the best way to move forward.”