ROSWELL DAILY RECORD: Governor signs airline subsidy bill

Surrounded by local lawmakers, Gov. Susana Martinez signed legislation in Roswell Wednesday that expands the ability of local governments to provide financial incentives to attract commercial airline service.

The bill-signing ceremony at the Roswell International Air Center was on the eve of new flight service between Roswell and Phoenix beginning today.

The bill Martinez signed Wednesday, House Bill 192, gives municipalities and counties the option to use up to 50 percent of their lodgers tax revenues to offer airlines financial guarantees to establish air service. It also allows municipalities or counties to issue revenue bonds secured by future lodgers tax proceeds.

Lodgers taxes are levied by counties and municipalities in New Mexico on the occupancy of motel and hotel rooms, with revenues often used to promote tourism and economic development. The city of Roswell reaps a 5 percent tax on lodging stays in the city.

Martinez said the legislation, which was pushed by Roswell’s GOP delegation and opposed only by Senate Majority Floor Leader Michael Sanchez, D-Belen, would help underserved areas attract air passenger service.

“House Bill 192 is now law. Fly and fly often,” said the governor, who has until Wednesday to take action on bills that passed both the House and the Senate in the 30-day legislative session in Santa Fe that ended Feb. 18.

Roswell offered American Airlines a financial guarantee in 2007 to entice the airlines to establish commercial air service between Roswell and Dallas-Fort Worth. That two-year minimum revenue guarantee, which has since expired, was not invoked because passenger service generated sufficient revenues for American Airlines.

Non-stop commercial flight service between Roswell and Phoenix, beginning today, was secured with a $1.2 million minimum revenue guarantee negotiated between American Airlines and several southeastern New Mexico governmental entities. The deal took three years to finalize.

Roswell leaders said American Airlines required a minimum revenue guarantee in the event passenger service with American Eagle, a regional carrier of American Airlines, does not meet expenses.

The municipalities of Roswell, Artesia, Carlsbad, Ruidoso and Chaves and Eddy counties put up a $750,000 minimum revenue guarantee over two years, including $125,000 from Roswell. A $450,000 small-community air service development grant from the U.S. Department of Transportation brought the total minimum revenue guarantee to $1.2 million.
The governor said Roswell and other New Mexico communities are seeking to grow and expand air service to more western hubs like Phoenix and Denver. She said the legislation will help Hobbs, Santa Fe, Farmington and other communities pursue flight service.

“We have to do more to attract businesses to New Mexico,” Martinez told the airport terminal crowd of about 100 people. “And Chaves County is so, so lucky to have a legislative delegation (of state lawmakers) that gets it.”

Martinez said House Bill 192 will allow smaller communities to attract major airlines “that otherwise might not take a chance on them.”

“Recent employment data shows that we’ve now had 40 straight months of year-over-year job growth,” the governor said. “We’re consistently a leader in the U.S. for our international export growth and more and more businesses are noticing New Mexico’s improved business climate.

“New Mexico is certainly moving forward. Our efforts to diversify our economy and to create a stronger private sector are full-steam ahead. We must do all we can to continue this momentum, and this is another one of those pieces that is going to continue that momentum.

“Places like Roswell and the surrounding communities really do have a lot to offer our tourists. This legislation helps us open up our state to even more people from around the country and from around the world.

“And guess what? In addition to more tourism dollars coming in, this legislation makes us more attractive to companies from around the world. I hear all the time when I travel, from mom-and-pop businesses to Fortune 100 companies, transportation links, like air service, are a key factor when deciding to set up shop in a state.

“This bill opens up economic prospects throughout New Mexico that weren’t there before. I am extremely happy to see this bill come through and get on my desk. It’s wonderful for Roswell and the surrounding areas.”

Martinez spoke with the Daily Record after Wednesday’s bill signing ceremony. She noted Sanchez was the only state lawmaker to oppose House Bill 192.

“I just think that it’s a good bill that all but one (lawmaker) had the courage to vote for something that’s good for business,” she said.

Asked if she viewed the bill as a corporate subsidy, the governor said the state sometimes subsidizes various industries.

“We do it for the film industry,” she said. “But the local community gets to decide how they use their lodgers tax. And expanding it to this purpose is totally up to how you want to do it, and if it’s good for the economy, just imagine how you’re going to be doubling and tripling the access to this part of the state and tourism and everything else. It will all come back to you in a different way.”

Asked if it is possible to have too many airports in too many cities, Martinez noted the state’s large geography.

“Sometimes driving two or three hours to get to an airport is kind of tough,” she said. “It’s what can be sustained (economically).”

House Bill 192 was co-sponsored in the New Mexico House of Representatives by state Reps. Bob Wooley and Candy Spence Ezzell, both R-Roswell, and carried in the Senate by state Sen. Cliff Pirtle, R-Roswell.

“We will now be an attractive destination for tourists from the entire Western United States,” Ezzell told the crowd. “Businesses that would not consider southeastern New Mexico in the past will now give us a closer look. The Phoenix flights create a tremendous opportunity for us.”

Ezzell said area state lawmakers and local leaders such as Roswell Mayor Dennis Kintigh, City Councilor Jason Perry and former state Sen. Tim Jennings, D-Roswell, worked together to usher the bill through the Legislature. In a bipartisan gesture, Martinez presented Jennings one of the pens she used Wednesday to sign House Bill 192 into law.

“And ladies and gentlemen, it was a joint effort,” Ezzell said. “We have representation here from Carlsbad, from Artesia, from Roswell, from the Lincoln County area. We understand what this has the possibility of doing.”

Wooley said the flights between Roswell and Dallas have greatly benefited the area’s economy. He said the Roswell-Dallas flights have been so successful the minimum revenue guarantee required by American Airlines was not needed.

“We may not even have to subsidize this,” Wooley said of the Roswell-Phoenix flights. “Thank you to Eddy County, Ruidoso, to Lincoln County, Lea County, everyone that put money in this fund also to make this possible.”

State Rep. Nora Espinoza, R-Roswell, said the Phoenix flights will avoid the need to fly to Dallas or drive to Albuquerque in order to fly westward.

“This is really going to be good for economic development and for everything else, and for all of the southeastern part of our state,” Espinoza said.

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