Northwest Regional Airport Authority (NRAA) wants Grand Traverse County to make an unnecessary and financially risky decision – co-signing up to $71 million in bonds to help fund its $172 million terminal expansion.
NRAA claims the expansion is needed for increasing air traffic and that they can easily afford the debt. The question for the county commission on Wednesday is: Who should assume the financial risk of the airport expansion – the travelers who fly through TVC or the taxpayers of Grand Traverse County?
NRAA does not need Grand Traverse County to back these bonds, it has authority to issue its own bonds for its expansion. Without the county co-signing, NRAA would simply pay a higher interest rate. Per their data, county backing would save NRAA about $375,000 annually in interest versus self-bonding. Putting that in perspective, NRAA projects 483,306 departing passengers (“enplanements”) in 2026. Taxpayer-backed savings amount to 78 cents per departing passenger.
To save less than a buck per passenger, NRAA is asking Grand Traverse County taxpayers to assume 30 years of default risk. If projected future airport revenues fall short of the average $4.8 million annual debt payment through 2055, Grand Traverse County taxpayers must cover the difference. An airport default could force the county to cut services, sell assets, or raise taxes.
NRAA is best positioned to assess its own operating revenues and costs; the county is not. Co-signing the airport bonds shifts the risk of default from travelers to county taxpayers for the next 30 years.
Backing the airport expansion bonds also risks higher costs for county projects. Grand Traverse County is already facing major bonding for emergency services and maintenance facilities (estimated $17 million), correctional and justice facilities (estimated $76 million), and government services facilities (estimated $41 million). That doesn’t account for aging courthouses, underfunded parks, and other vital capital needs.
Our county representatives worked diligently to improve our credit rating, which will save taxpayers millions on these foreseeable and necessary county projects. County taxpayers should reap the financial benefits of our excellent credit rating to reduce costs for county projects.
Co-signing airport bonds increases the risk of a county credit downgrade and, consequently, higher interest costs for county projects.
The airport can, and should, bond for its expansion on its own credit. Grand Traverse County should protect our bond rating and reserve our borrowing capacity for vital infrastructure and services that our constituents demand.
Declining to co-sign airport bonds simply means air travelers – not local property owners – bear the costs and risks of the airport expansion.