The state Assembly passed a bill to provide loan guarantees of up to $10 million to state airlines in a 57-35 vote Thursday.
The bill, introduced at the request of Gov. Scott McCallum, would allow the businesses to get loans from financial institutions, with the state acting as a co-signer.
While the loans cannot be used for general operating expenses, they are able to assist in building new airport maintenance facilities, which Air Wisconsin plans to do at General Mitchell International Airport in Milwaukee.
State Rep. Jeff Stone, R-Greenfield, co-wrote the bill with state Sen. Richard Grobschmidt, D-South Milwaukee, giving the bill bipartisan support in both houses of the Legislature, Stone said.
The bill guarantees loans would be available to aviation businesses headquartered in Wisconsin that transport people, deliver packages by plane or operate aircraft such as crop-dusters for the benefit of agribusiness.
\All dollars would come from private banks,"" Stone said. ""If the airlines are unable to repay the loans, the state will step in.""
Economic distress in the wake of the
Sept. 11 attacks has cut airline profits and banks are leery about loaning money, Stone said.
""The bill would help stabilize loaning for these airlines so they can continue with the expansions they've planned,"" he added.
Stone said he hopes the bill will stimulate growth in the state airline industry, which could help lead to the re-hiring of airline employees who lost their jobs after the attacks.
""Four hundred fifty employees were laid off at Midwest Express,"" Stone said. ""If we can help [the airline] to get back on track, if we can get those families back to work, then perhaps we can ease some of the suffering they're having because of the attacks on our country.""
Assembly Assistant Minority Leader James Krueger, D-Kenosha, voted against the bill and said he thinks the bill has many shortcomings.
""The bill doesn't help working men and women in Wisconsin. It doesn't address safety issues in Wisconsin. People want a higher comfort level'that will fill airplanes up more than a building in the corner of an airport,"" Krueger said, referring to building maintenance facilities supported by the bill. ""I think this bill has so much damage that's dragging it down, it will never get off the ground.""
Grobschmidt said he hopes that when the bill is forwarded to the Senate it will be passed in a comprehensive package consisting of several bills that are being introduced in response to the Sept. 11 attacks.
""Taxpayers would not be held liable if loans were, for some reason, not able to be paid off,"" Grobschmidt said. ""Businesses still have to apply. They still have to qualify. They have to repay, and if they don't, the state has a right to seize their assets, such as the airplanes.""
The bill will be forwarded to the Senate Thursday.
