Members of the Kansas City Council will begin considering a proposal Wednesday to put a new airport terminal on the November ballot.
The plan, proposed by City Councilwoman Katheryn Shields, is pretty straightforward. It would ask voters to authorize issuance of public airport bonds, up to $990 million, to “construct a new passenger terminal at Kansas City International Airport.”
The key word here is “public.” Shields wants the city to borrow money for the terminal, the way virtually every other public project in America is financed.
Her plan deserves full consideration in the weeks ahead.
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Voters shouldn’t be worried about or misled by the possibility of a so-called public option for financing the airport terminal project. Cities, counties and states borrow money all the time by issuing bonds.
In fact, in April, voters overwhelmingly approved $800 million in public bonds for infrastructure repairs in Kansas City.
Those infrastructure bonds will be repaid by taxpayers. Aviation bonds, on the other hand, will not: The bonds would be repaid with fees on airlines and travelers.
Let’s say it again. Taxpayers are not responsible for repaying public airport revenue bonds.
Confusion on this point terrifies city officials and some boosters of the terminal project. They point to polling that shows the public thinks taxpayers are somehow on the hook if something goes wrong.
Under that proposal, a company subsidiary would borrow the funds instead of the city. Burns & McDonnell would not pay for the terminal out of its own pocket. It would simply replace the city as the borrower.
Supporters of this approach say it would simplify the process, resulting in quicker construction. And it would further protect the voting public from paying for the terminal — in perception, if not in reality.
There is a potential downside to the private approach, though. It may cost more. Interest rates on private bonds are usually higher than on public borrowing.
Because public borrowing is cheaper, more money can be spent on bricks and mortar and less on interest.
Burns & McDonnell disputes this conclusion. Firm officials say private financing might be just as cheap as public borrowing with less perceived risk.
But the public can’t know if that’s true unless people can compare private and public financing plans. Kansas Citians also can’t know if any private parties would secretly benefit from either approach.
That’s why Shields’ public option is so important. It provides a yardstick for the private options offered by Burns & McDonnell and any other bidder for the airport.
Kansas Citians need that yardstick. They should get a simple sheet of paper comparing the costs and benefits of public and private options, side by side.
The Star supports a new airport terminal. We think the best way to get voters to say yes is to provide them complete information about the choice they’ll soon be asked to make.
Wednesday’s discussion is a good start.