S.L. could use $1 million Delta owes it in taxes

As Salt Lake City Council considers how to pay for more asphalt, flower pots on Main Street and broken light poles on the Jordan River trail, it may have $1 million less to use because Delta Airlines is delinquent in paying its property taxes.

The airliner, which declared bankruptcy in September 2005, owes nearly $4 million in Salt Lake County property taxes. The city's share of the bill is $1.17 million.

While that amount is about 1 percent of the city's $100 million budget, the $1.17 million could pay for several smaller projects on the council's agenda, including a bridge for the Jordan River trail, a bike trail crossing over 1300 East, airport property insurance, and gas for the city's fleet.

"Potentially if we have that $1 million-dollar loss and we don't have any other sources to come up with it, then we would have to go in and look at program cuts," said Gordon Hoskins, the city's finance director.

Salt Lake County cannot go after Delta's assets for the back taxes, said County Treasurer Larry Richardson, because the federal court controlling the company's bankruptcy proceedings controls Delta's finances until the company folds or comes out of bankruptcy. Richardson said this is the first time since at least 2000 that Delta has not paid its property taxes on time.

Delta spokesman Anthony Black declined to provide details about the company's tax bill in Salt Lake County. "In accordance with bankruptcy rules, Delta has not made payment of pre-petition taxes," Black wrote in an e-mail. He did not say whether Delta may also owe money to other municipalities across the nation.

The unpaid taxes are the latest manifestation of the company's financial struggles. Delta failed to meet a March 1 deadline for negotiations with its pilots' union. Arbitrators will hear the company's case for throwing out its pilots' contracts in a hearing on March 13. Delta also drew ire from its employees in February after they learned that it wanted to pay up to $14 million in severance packages to managers — money that its employees said would be better spent in saving jobs.

Meanwhile, the Salt Lake City Council will hear its quarterly budget update tonight. The city reopens its budget four times a year to add or adjust funding for projects.

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E-mail: kswinyard@desnews.com