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State lawmakers look at helping Northwest
By Laura McCallum
Minnesota Public Radio
September 18, 2001

As Congress considers a $24 billion airline bailout package, some Minnesota legislative leaders think the state should look at ways to help Northwest Airlines, one of the state's largest private employers. Northwest lost as much as $300 million when planes were grounded after last week's terrorist attacks. Lawmakers agree the airline is a major contributor to Minnesota's economy, but there is no concensus on whether the state should step in with assistance.

The DFL Senate caucus gave unanimous support on September 19th to a $24 billion airline bailout package being considered by Congress, and is considering other ways the state can help Northwest. Joining Moe,left, was Sen. Len Price, DFL-Woodbury, and Sen. John Hottinger, DFL-Mankato.
(MPR Photo/Laura McCallum)
IT'S BEEN NEARLY 10 YEARS SINCE MINNESOTA LAWMAKERS approved an $838 million financial aid package for Northwest Airlines to build new maintenance bases on the Iron Range. At the time, DFL Senate Majority Leader Roger Moe voted against a major component of the package - a $270 million loan from the Metropolitan Airports Commission - calling it a good deal for Northwest, but no for taxpayers. Now, Moe says lawmakers should consider restructuring that loan, to help the airline through dire financial straits.

"Based upon the economics that they're facing right now, and as is the case whenever there's military action, that has an impact on fuel prices. That would be another hit to the airline as well, so I think we have to look seriously at how we might be able to provide some sort of short-term temporary assistance here," Moe says.

Moe says the state could suspend the state aviation fuel tax, which brings in about $4 million in revenue per year. Other legislators want to look at landing fees and other taxes. DFL Sen. Deanna Wiener, whose Eagan district includes Northwest's headquarters, says the airline is one of Minnesota's strongest economic engines, and the effects of its cutbacks will ripple through the state's economy. She says the state could supplement federal assistance to help Northwest with its financial crisis.

"I think the dollars that we save - we have to make sure those same dollars are going to be coming back to our economy. That's what the important link is here. It's not just a bailout," says Wiener.

There's less enthusiasm for the idea of state aid to Northwest in the Minnesota House, where Republican leaders want to wait and see what the federal government does to help the airline industry. House Majority Leader Tim Pawlenty of Eagan, says Northwest has yet to request any assistance from the state.

"I think the worst thing we could is start panicking and speculating about what might be helpful before we even know what the airlines want," Pawlenty says. "I respect what my colleagues are saying and doing, but I don't think we want legislators setting the agenda for the airlines. I think we should have the airlines tell us what they need, and then evaluate whether that's a reasonable thing to do."

A spokesman for Gov. Ventura says the governor has talked to Northwest CEO Richard Anderson, but any talk of state aid is premature. The airline's financial woes come as the state is looking at the prospect of a budget shortfall for the first time in eight years. Former Gov. Arne Carlson, a Republican who pushed for the Northwest aid package in the early '90s, says while the state's financial picture isn't as rosy as it was a few years ago, legislators could do several things to help Northwest that wouldn't call for a direct cash subsidy.

"Renegotiating the loan, or easing up on some other restrictions, or possibly putting together a loan package - none of that would be impacted by the economic climate in Minnesota," Carlson says.

Carlson and many legislators say if the state does consider helping Northwest, the events of a week ago will make for a much different debate than 10 years ago, when critics said Northwest was asking for a handout. Legislators are apt to be more sympathetic this time, when the airline's financial problems are caused by acts of terrorism that have shaken the country.