Property tax exemptions at Allegheny County airport raise squawk
Borough leaders in cash-strapped West Mifflin accuse county officials of unfairly exempting some businesses that operate at the Allegheny County Airport from paying property taxes, and they want the exemptions to be reviewed.
The county board that granted the exemptions and the businesses that receive them say that they’re only following state law and that West Mifflin had a chance to oppose the exemptions but didn’t.
“I don’t understand how a business (that) is for-profit and that owns charter jet lines for business is tax-exempt,” Mayor Chris Kelly said.
Of 85 parcels at the airport, 29 are exempt from property taxes. Of those, the county owns 18, all hangars; the other 11 are privately owned but exempt under state law, according to borough records.
David J. Montgomery, solicitor for the county Board of Property Assessments Appeals and Review, said the county airport businesses receive the tax abatement under a law that allows some businesses, such as restaurants, to avoid paying property taxes because they are essential to airport operations. Restaurants at Pittsburgh International Airport in Findlay get the break, he said.
If the borough objected to the exemptions, which the county granted in 2008, it had the right to appeal in court but did not, Montgomery said.
“In my world, you don’t get to complain about a bad deal unless you’ve appealed,” he said.
County Executive Rich Fitzgerald, who met with borough and Airport Authority officials about two weeks ago, said the county will review the exemptions.
CAM Investments Inc., an affiliated company, Corporate Air Management Inc., and PNC Bank own property at the airport that has been tax-exempt since 2008, said Dennis Cmar, business manager for the West Mifflin Area School District. PNC bought its property, a hangar, from Corporate Air last year after the county granted the exemption.
The Office of Property Assessments denied CAM’s and Corporate Air’s applications for exemptions, but they appealed and won, said county spokeswoman Amie Downs.
Attorney Jack Cambest, who represents the borough in tax issues, said the borough shouldn’t have to take on the expense and time to fight questionable tax exemptions.
“Why do I have to appealâ¢ Why did you find them exempt in the first place?” he asked.
Philip Ehrman, vice president of CAM Investments, defends the exemption.
“I think it was because we provide services that are generally available to the public. In general, we’re kind of servicing aircraft like a government authority would,” said Ehrman, who pointed out that Corporate Air voluntarily makes annual payments to the school district.
CAM Investments owns a majority of Corporate Air, which provides aviation repair, fuel and charter flights and has 100 employees, Ehrman said. CAM Investments and Corporate Air were exempt in 2011 from paying property taxes of $52,939 to the school district and $16,739 to the borough, though Corporate Air pays $13,346 annually to the district by agreement, Cmar said.
West Mifflin officials are criticizing Corporate Air unfairly, said Ehrman, who notes the company simply applied for an exemption the county granted.
“We don’t make the laws,” he said.
Corporate Air and CAM Investments own 10 parcels at the airport, including six hangars, a fuel farm with above-ground tanks and a shed. Corporate Air has been in business for about 30 years and is open 24 hours a day, he said.
West Mifflin officials say the exemptions cost the borough needed money. The borough cut services and employees and froze wages for a second consecutive year to close a $1.5 million shortfall in this year’s $13.2 million budget.
County officials would not say whether PNC would continue to get the exemption on its hangar. A PNC spokesman said the bank was leasing the property, but county records indicate PNC owns the hangar.
Kelly and councilmen John Munsie and John Andzelik say the borough lost tax money — though officials could not say how much — when the county demolished 15 privately owned hangars in 2007 to make way for 18 tax-exempt hangars the county leases out.
Legally, those county-owned properties are exempt from taxation because they are used for public purposes and advance “social, moral or physical objectives” under the state’s Purely Public Charity Act, county documents say.
“The airport collects rent and lease revenue, but we get nothing from them,” Munsie said.
The airport authority plays no role in granting businesses tax-exempt status, authority solicitor Jeffrey Letwin said.
The airport generates taxable annual income of more than $94,000 to the borough and $272,000 to the school district, Letwin wrote in a Dec. 22 response to the borough’s request that the authority contribute more financially to West Mifflin.