The Minnesota Supreme Court last week heard oral arguments on a lawsuit that challenges the state's ability to issue bonds to assist Northwest Airlines.
Mary Kay Milla, spokeswoman for the Minnesota attorney general's office, said the state's highest court will issue a ruling by early February.
The suit claims that a state law permitting Minnesota and the Minneapolis/St. Paul Metropolitan Airports Commission to issue $620 million of bonds to assist Northwest's expansion plans violates a state constitutional ban on public taxation for a private purpose.
The state has delayed the issuance of up to $350 million of general obligation bonds to finance the construction of maintenance facilities in Duluth and Hibbing for Northwest until the suit is resolved. In April, the airports commission sold $270 million of bonds to assist the airline.
In June, the Minnesota Court of Appeals upheld a Ramsey County district court's dismissal of the suit. The plaintiffs did not comply with the lower court's order to file a $30 million surety bond with the court.
In July, the couple petitioned the state high court to review the case, and state Attorney General Hubert Humphrey 3d requested that the court clarify the constitutional issues of the suit.
In a report issued last week, Moody's Investors Service said the airports commission has the authority under state statute to levy an unlimited property tax on the Minneapolis-St. Paul tax base in the event of a default of its bonds, regardless of whether the maintenance facilities are built.