MINNEAPOLIS (AP) -- In 1992, Minnesota taxpayers loaned a troubled Northwest Airlines $270 million. Well, Northwest is still in trouble -- and after 11 years of payments, its tab with the state has actually grown by $12 million.

Further, the decline in the airline industry has hurt the value of Northwest's collateral backing those 1992 bonds -- pilot training equipment, airplane parts and European routes. The collateral's value has fallen by about $110 million, according to an estimate made by the Metropolitan Airports Commission, the Star Tribune reported on Sunday.

The MAC is wary of formally reappraising the collateral, despite Northwest losing more than $1 million a day in recent years in the face of what may be a permanent decline in airline customers. MAC officials have postponed an official appraisal of collateral until next spring.

That leaves the MAC in a quandary: Either allow Northwest to carry a debt that may no longer have enough collateral, or call in the debt, potentially forcing Northwest into bankruptcy.

MAC Executive Director Jeffrey Hamiel imagines a scenario where an appraisal shows Northwest's collateral is worth $110 million less.

"Then the question becomes, 'Do they even have the collateral left in their inventory to make us whole?"' he said. "If they don't, then what do you do, force them into bankruptcy?"

In a January 2003 report to the MAC, Northwest estimated its collateral at the end of 2002 was worth $69.5 million more than the required value of assets pledged on the loan.

Northwest said in a statement it "is in full compliance with all terms of the agreement and expects to remain so for the life of the loan."

In a worst-case scenario, if Northwest were to default on payments, MAC could impose a property tax in the seven-county Twin Cities area to ensure that bond holders are repaid -- a power the airport authority has not used since 1969.

The $270 million loan in 1992 followed contentious hearings and intense maneuvering in the State Capitol, and dominated the news and public debate for months. Supporters of the loan bristled at the idea that it was a bailout, focusing instead on the jobs Northwest promised for northern Minnesota in exchange for the money.