It is truly unfortunate that the very top executives of the airline companies operating out of Houston did not dialogue with the Prop 2 Houston TABOR leaders, including the architect and author of Prop 2, before buying into the mayor’s hard-line stance against the TABOR and becoming the principal financial underwriter of the mayor’s anti-TABOR efforts.

Had the executives engaged in the needed dialogue, they would have found that every one of the TABOR leaders unequivocally concurs with the airline executives that the Houston airport system and the airline companies are extremely vital to Houston and its economy. That goes without saying and is not the question.

The dialogue would have also helped the executives immediately understand that the TABOR does not threaten the airline companies whatsoever and that the TABOR actually is very good not only for the entire Houston economy, but also, as explained later, it is very good for their companies and employees.

The airline company executives probably understand even better than the general public that the City’s taking of an ever-increasing percentage of the local economic pie is unsustainable over time and eventually is a ruinous economic policy. Therefore, presumably the airline executives would be eager advocates of any efforts, such as the TABOR, to assure prevention of such an economic danger.

The airline executives could benefit from reading a research analysis of the need for a Houston TABOR that was written by University of Houston economics professor Steven Craig. Professor Craig’s research report leaves no doubt about the need for the Houston TABOR. Professor Craig is the same individual relied upon by the City and the airlines to research and report upon the economic impact of the airport system upon the Houston area economy.

During the 20 years prior to the submission of the Prop 2 TABOR petition to the City in 2001, City spending had grown at twice the City’s combined growth rate of population and inflation, and long-term debt at four times. Surely the airline executives understand the need to bring that ruinous trend under control. It was obvious that the politicians were not going to even try to do so, thus the citizen-initiated Prop 2 TABOR petition to change the City charter was born. After being legally stonewalled from the ballot box by the City for 3 years, over 242,000 Houstonians approved the TABOR charter change in November 2004.

Now the airline companies have become a small unwitting, but very critical pawn in the mayor’s chess game to gut the TABOR through offering Props G and H to an-about-to-be-duped voting public. The real target of the mayor’s Prop G is the removal of the water and sewer fund from the TABOR revenue cap. The water and sewer fund revenues are greatly larger than those of the airport fund.

Even though the City’s water and sewer rates have been the highest of the ten largest US cities for quite some time and the City’s water and sewer long-term debt has more than doubled over the last 10 years, the mayor wants to rip the newly-acquired TABOR voter control way from the water and sewer fund. The financial well-being of the airlines and the personal finances of its employees are going to be hit hard if the City is allowed to return to such times as the 1980s when City water rates increased 119% and sewer rates 161%. Surely the airline executives do not wish that to occur. But that is exactly what will occur if the airlines help pass Prop G.

The mayor’s Prop H companion to Prop G will gut voter control over the City’s property tax revenues and other sources of general fund revenues.

As one of the City’s ten largest employers and property tax payers, Continental Airlines, and its employees, should be working for, not against, keeping TABOR voter control over the City’s out-of-control revenues, spending and long-term debt, rather than being the unwitting foil in the mayor’s efforts to pass his disingenuous Props G and H designed to end the just-acquired voter TABOR control.

It is apparent that the airline companies need to gain an understanding as to what the TABOR actually does and does not do.

The TABOR does not prevent anything. It simply requires that voter approval be obtained before the City can increase its TOTAL revenues, NOT AIRPORT revenues, in any given year by more than the combined growth rate in population and inflation.

The airport fund’s operating revenues are only about 14% of the City’s total revenues, according to its last (2005) available audited financial report. So it would take a monumental change in the airport fund revenues to cause the TABOR cap to be violated.

Federal and state laws require that all airport revenues be used for airport purposes. Therefore, if the TABOR revenue cap is exceeded the City could merely refund the overage to the airlines, as the airport revenues are a cost to the airlines. The airlines could then decide whether to keep the money or refund it to passengers via ticket price adjustments. Either way, the TABOR cap and rebate would stimulate the Houston economy rather than hurting the airlines and their employees. And if the City actually needed the excess airport revenues the City could keep it, if they could convince the voters they needed it. What is so difficult to understand about all of this?

Incidentally, the TABOR critics concentrate their objections on what happens if landing fees jump. In fiscal 2004, landing fees were only about 2% of the City’s total revenues. In fiscal 2005 landing fees jumped to about 4% of the City’s total revenues---basically due to the City DOUBLING its landing fee RATE at Bush Intercontinental, with nary a peep from the airlines, who apparently had been sold a bill of goods that the increase was necessary for a new runway.

Fact was the additional revenue was needed to cover the cost of numerous employees being moved to the airport fund from the general fund and being classified as “airport operations aides”, whatever those non-security personnel are. Shell games for not having to raise property tax rates don’t necessarily involve transferring revenues from the enterprise funds to the general fund. The City can just transfer the cost to the enterprise fund.

The airport fund is a landlord operation. The airport controllers and the security personnel are federal agencies’ employees. The ticketing and boarding agents, ground crews and baggage handlers are airline employees. Seldom do you encounter or need a City employee, other than City cops patrolling the area. As a landlord operation, the only time the airport system’s revenues materially increase is when new facilities are built and lease income comes on stream.

So, yes, a projected jump in income from new airport facilities might require voter approval per the TABOR. What is wrong with that? The resulting increase in airline ticket prices from the airlines passing through their added lease costs is nothing but another hidden tax, and who uses the airlines the most? Houstonians?

State law requires that Houstonians get to vote on issuance of any public improvement bonds such as for public safety and the other core missions of the City. So why should voters not get to vote, in effect, on airport and other enterprise fund bonds, which relate to endeavors that the City OPTED to get into and are not within the core mission of the City?

If the airlines are opposed to the democratic process of letting Houstonians vote on new airport bonds, certainly the airlines are welcome to issue their own bonds, as Continental did on terminal E at Bush Intercontinental.

As operations not within the core mission of the City, the enterprise funds need more, not less, oversight by voters. This need is exacerbated by the fact that city council pays little attention to the enterprise funds, particularly the airport fund, when compared to their attention to the general fund.

Speaking of laws, there are two state laws that voters should keep in mind.

The first law provides that the City of Houston can levy a special property tax to underwrite losses in the airport fund. That is troubling in that the airport fund has shown a loss from operations in the last two years of its publicly released audited financial statements. The continuing travails of the airline industry make the specter of an airport property tax even more troubling.

The TABOR would require voter approval before the City could impose the new property tax to underwrite its inability to control its airport operating costs. Further, the TABOR would force a rebate to the airlines if the City tries to pass its operating inefficiencies off to the airlines via additional charges to the airlines. Considering the airport fund’s repetitive operating losses in recent years, the airline companies should welcome the TABOR with open arms.

The second state law permits the City of Houston to let airport contracts without requiring competitive bids.

Even knowing all of the foregoing, the TABOR leaders went with hat in hand to the mayor and offered to work with him in order to remove the airport fund from the TABOR revenue cap. They did this in hopes of ending the mayor’s divisive legal efforts to block implementation of the TABOR. The mayor has used a MINIMUM of $100,000 of taxpayers’ monies in his legal stonewalling efforts.

However, the mayor refused the TABOR leaders’ offer to remove the airport fund from the TABOR. Instead, he has chosen to keep the airlines’ imagined problems with the TABOR front and center in order to divert attention from his real goal, to rip voters’ hands from the throttle controlling the rate of growth in water and sewer rates, property taxes and every other conceivable way to get in Houstonians’ wallets.

It is not too late for the airline companies to endeavor to learn the truth about the mayor’s propositions, and help the voters instead of the politicians!

Don’t Be Fooled!

VOTE NO TO ALL 8 CITY PROPOSITIONS A THROUGH H!