Money to run the city of Killeen is tight, and that means council members are going to have to make some hard decisions in the coming weeks.
Among those decisions is what to do about airport parking fee exemptions for veterans who are at least 50 percent disabled, as well as for certain military medal recipients.
The idea behind the exemptions is a laudable one — recognizing the service of those who were wounded defending our nation.
The policy predates the current airport, Killeen-Fort Hood Regional Airport. The initial state law, passed in 1995, allowed for veterans’ exemptions in two categories; these were expanded to five in 1999. Killeen has honored the parking exemptions since the state first authorized them.
Today there are 23 exemptions, and the city adopted an ordinance to recognize all 23 in 2015.
However, what started out as a heartfelt gesture has turned into a budget nightmare.
Just in the last four fiscal years, the exemptions have gone from accounting for 23.6 percent of the city’s gross parking revenue to 41.3 percent. In the last fiscal year, those exemptions accounted for 11.7 percent of all airport revenue — a staggering $307,800.
A city staff report presented to the council last week painted a bleak picture of what would happen if the exemptions were kept as is: the airport fund balance would go nearly $500,000 in the hole over the next four fiscal years.
Moreover, the projection showed the airport needing a subsidy from the city by 2021 in order to stay afloat.
By contrast, if the exemptions were halted, the projection showed the airport balance growing to more than $1.1 million in the same time frame.
Other cities with military bases aren’t feeling the pinch to the same degree as is Killeen.
Austin is losing just 5.4 percent of its parking revenue by offering the exemptions; El Paso is down almost 7 percent and San Antonio saw a 14 percent loss as a result of parking freebies, city figures show.
However, those three cities have much bigger revenue losses than Killeen, with Austin’s percentage accounting for $1.2 million and San Antonio’s loss translating to nearly $2.7 million in revenue. The difference, of course, is that those big-city airports have much larger passenger bases — and bigger overall budgets — to work with.
Killeen, on the other hand, has seen generally declining enplanements over the past four years. Airport parking revenue has fallen by 9 percent since 2014, while the amount of exempted revenue increased by 9 percent — certainly, not a sustainable trend.
What should the Killeen council do? That’s not an easy question, especially given the community’s close ties to the military and our deserving veterans.
However, there comes a time when economic realities have to take precedence over well-meaning, feel-good policies.
Given the airport’s declining revenues and the city’s projected $26 million revenue shortfall by fiscal year 2037, the council has little choice but to trim the exemptions.
However, rather than rescind them entirely, the council would be prudent to consider a 50 percent discount for the currently exempted veterans who fly out of the regional airport.
While it would not provide the airport with a million-dollar fund balance in four years, a 50 percent discount wouldn’t push the airport budget nearly a half-million dollars into the red, either.
By splitting the difference, the city can still show its appreciation for our deserving veteran population while keeping the airport’s bottom line in check — barring any dramatic downturns in revenue.
Another option staff offered to the council was placing a time limit on the exemption — for example, offering free parking for the first day or two but charging the non-exempt rate after that time.
The report also offered the possibility of increasing parking fees for nonexempt airport users to help cover the shortfall.
The council may decide to approve a combination of these options, and that’s fine. If our elected officials can find a way to stop the airport revenue drain while still acknowledging the service of our disabled veterans, that’s a win-win for our community.
Still, the solving the airport parking issue is relatively simple compared to the larger budget considerations the council must face.
Water, sewer and street infrastructure spending are far below what is required to provide adequate maintenance. And it won’t be long before the city must authorize a $20 million project to widen and improve roads serving the Killeen school district’s new high school, which will open in fall 2021.
To complicate matters futher, the state-mandated property tax exemption for disabled veterans is putting a $5 million dent in anticipated revenue, according to projections. Last year, reimbursement from the state totaled just $1 million — not nearly enough to close the gap.
Obviously, council members have their work cut out for them when it comes to producing a workable budget for the coming fiscal year.
Certainly, cutbacks will be necessary, though significant cuts to programs and services would likely draw protests from Killeen’s taxpayers.
Of course, budget cuts alone won’t address the city’s tight-money situation — especially over the long haul.
It may be an unpopular option, but council members will have to consider new fees, such as a transportation utility fee or impact fee — or both — in order to provide additional stable revenue streams the city needs to augment sales and property tax revenue already in the pipeline.
Killeen city staff last week provided the council with a “wish list” of about 140 major projects the city could potentially undertake over the next 25 years to accommodate city growth. Total price tag for these capital improvement projects, which is topped by some urgently needed road projects, is nearly $900 million.
However, given the city’s current budget struggles, it may be quite some time before the city’s in any position to tackle many of the projects on the list.
Still, the city must develop a road map to get to that point.
And addressing the city’s current airport parking revenue shortfall may be the first stop on that journey.