Bill could end Gary airport bi-state pact, stuns mayor who cites loss of revenue
Without explanation, the Republican-controlled General Assembly approved the termination of a bi-state alliance that's pumped millions of dollars into the Gary/Chicago International Airport.
The move comes as state lawmakers scrambled to cut millions from the state budget Thursday after a revenue forecast projecting a $2.4 billion shortfall.
An amendment to House Bill 1142, approved on Thursday, requires the Gary City Council to terminate the Compact by 2030.
The language on the termination was a late addition into House Bill 1142, which addressed tax fiscal matters.
Sen. Lonnie Randolph, D-East Chicago, was listed as a sponsor on House Bill 1142, but he was one of just three senators who voted against the bill which passed 47-3.
In the House, Rep. Ragen Hatcher, D-Gary, was the lone dissenting vote on the bill that passed 78-1.
Earlier, House Bill 1001, the state budget bill, called for the city council to terminate the compact by Jan. 1, 2026.
Gary Mayor Eddie Melton said via a statement Friday the legislation caught him off guard.
'Thanks to a Northwest Indiana delegation downstate, this mandate has been pushed back by five years, but the potential consequences remain severe,' Melton said.
'If enacted as originally intended, we would risk losing millions of dollars in funding from our Compact agreement with Chicago, as well as critical FAA grants that sustain our airport's day-to-day operations.
'This legislative move is especially troubling in light of the growing investment in and around the airport that my administration has been able to accomplish within my first 14 months in office. One major project, a $40 million development, set to begin this year, is expected to bring hundreds of new jobs to Gary and Northwest Indiana.
'This sends mixed messages to the private sector and could jeopardize our partnership with Chicago.'
Melton said he plans to work with Chicago Mayor Brandon Johnson and Compact members to determine the best path forward.
'We will not be deterred in our commitment to protecting the economic future of Gary,' Melton said.
Gary City Council president Lori Latham, D-1, said in a statement the council didn't become aware of the compact termination language until Thursday — the final day of the legislative session.
'We are closely reviewing this bill, its impact, and all legislation affecting Gary and will be engaging Gary residents on our evaluation and next steps.'
A Gary council member voiced disapproval of the earlier language Thursday when it called for a council vote to terminate the Compact by Jan. 1, 2026.
'I would not vote in favor of dissolving the Compact,' said Councilman Darren Washington, D-at-large. 'It's been beneficial in bringing money to the airport.'
Washington, who heads the council legislative committee, said he's concerned lawmakers would enact legislation without talking to city officials.
Randolph said Friday he added his name to House Bill 1142 because he was told the Compact termination language would be removed.
'The point is I didn't find out about them putting it back in and giving them five years… They decided to take control of the airport and the airport belongs to the city.'
Randolph didn't know who inserted the language, but said it came from the House.
'There's somebody behind it, I don't know who it is and somebody has an ulterior motive… That's why I voted against it.'
The compact has been in existence since 1995 when former Chicago mayor Richard M. Daley and former Gary mayor Scott King forged the pact, aimed at creating a regional approach to air transportation.
'In substance and symbol,' Daley said, 'it reflects the fact that we are one economy, one region, working together.'
Officials credited Chicago's influence with the 2003 creation of a deal that brought Boeing's corporate fleet to the Gary airport.
The bi-state agreement preserved Chicago's control of revenue from O'Hare and Midway airport and it called for Gary's airport to receive more than $1 million for three years, doubling its annual budget. Chicago also promised to market Gary and steer cargo and passenger air carriers toward Gary.
Over a decade, Chicago pumped $14 million into the Gary airport.
'The city of Chicago has given more money to the airport than the state of Indiana,' Daley said in 2005 while lobbying former Gov. Mitch Daniels for the successful creation of the Northwest Indiana Regional Development Authority to boost airport development.
That same year, the legislature also revamped the airport authority leaving Gary still in control, but adding representatives from Lake and Porter counties and overseen by a chairman appointed by the governor.
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