Thursday, June 4, 2009

The Daniels/Ballard CIB Plan: More Taxes and a $15 Million Giveaway to the Pacers

I have to admit, when I read John Ketzenberger's column this morning, I was intrigued that Governor Mitch Daniels and Indianapolis Mayor Greg Ballard had finally started thinking out of the box when it came to a proposal to bail out the Capital Improvement Board. The first order of business we were being told was to blow up the CIB. Great idea.

Then when I read Governor Daniels proposal this morning this afternoon, my heart sank. Bill Ruthhart of the Indianapolis Star reports on the proposal:

The Capital Improvement Board’s projected $47 million deficit will be solved more through expense reductions than through tax increases, Mayor Greg Ballard and Gov. Mitch Daniels announced in a joint news conference this morning.

Under their proposal, $27 million would be saved in expense reductions while an additional $20 million would be raised through increasing Marion County’s hotel, admissions and rental car taxes and expanding the city’s professional sports development area to include the new JW Mariott hotel.

The CIB also would no longer exist under the proposal and would be merged with the Marion County Building Authority to create a new entity, the Facilities Management Board of Marion County, which will operate 13 facilities within the city.

Daniels and Ballard presented their proposal after two independent reviews of Indianapolis stadium and convention center operations were conducted. After those reviews, it was concluded $27 million could be saved through expense reductions.

The new Facilities Management Board of Marion County would oversee the following facilities: Conseco Fieldhouse, Victory Field, Lucas Oil Stadium, Indiana Convention Center, City-County Building, Arrestee Processing Center, Marion County Jail, Public Safety Training Academy, Juvenile Justice Complex, Belmont Garage, Department of Metropolitan Development properties, Public Safety Communication System and the Riverside Garage.

The new board would have nine members, three appointed by the mayor, two by Marion County commissioners, two by the governor, one by the City-County Council and one by the president of the Indianapolis Convention and Visitors Association.

Under the Daniels/Ballard proposal, a new purchasing coalition would be formed to include the new board, the ICVA, the Indianapolis Airport Authority and the Health & Hospital Corporation to realize additional savings. In addition to the $27 million saved through expense reductions, $20 million would be raised through taxes.

An additional $8 million would be generated by expanding the city’s professional sports development area to include sales and income taxes from the new JW Marriott hotel under construction near Victory Field.

Another $12 million would be generated through tax increase in Marion County:

>> $4 million from an increase in the Marion County hotel tax from 9 percent to 10 percent.

>> $6 million from an increase in the Marion County admissions tax from 6 percent to 10 percent.

>> $2 million from an increase in the Marion County rental car tax from 4 percent to 6 percent.

“I have maintained all along that this is about the preservation of the convention and hospitality industries in Indianapolis,” Ballard said. “That’s what we’ve set out to protect, and that’s what we’ve done here today.

Mayor Ballard is absolutely right that he has "maintained all along that this is about the preservation of the convention and hospitality industries." He has repeated that lie consistently. What anti-Republican world is Mayor Ballard living in though that taxing an activity more will produce more of that activity? He suggests, apparently with a straight face, that raising taxes that hits hard the convention and hospitality industries hard, is somehow a good thing for those industries. The proposed tax increases will give Indiana some of the highest hospitality taxes in the country and apparently the highest hotel tax. Does he not realize that will be used against Indianapolis when soliciting convention business?

As far as the new Facilities Management Board of Marion County, which is supposed to take over the CIB's activities, after reading Ketzenberger's column I was looking forward to a board with more state players who, although they have not always acted in a responsible fashion, are still light years ahead of the Marion County GOP/Democrat country club that is constantly giving away our tax dollars to big money interests. Instead, of 9 board members, 7 are local appointments, including one that is a financial beneficiary of the CIB and the new FMB, the Indiana Convention Visitors' Association. One has to wonder whether Mayor Ballard appoints CIB President Bob Grand to this new board. Mayor Ballard has proved tone deaf when it comes to conflicts of interest his appointees have.

It's interesting that after two studies, they found $27 million dollars in "expense savings." It is unfathomable that you could have "expense savings" of that magnitude. It either shows the CIB was horribly managed or was lying about the deficit, or most likely both.

The Daniels/Ballard plan mentions nothing about contributions from the Pacers or Colts and includes the $15 million covering of the Pacers' operating costs at Conseco Fieldhouse. Again, I cannot emphasize this enough. Our city and now state leaders have accepted that taxpayers have to pick up all the operating costs for the Pacers on a building, Conseco, in which the Pacers get 100% of the revenue. This is money the Pacers have declared they did not even ask for and which payment is not even required under the contract.

So in short, they looked at the $47 million dollars, and found they could easily cut the deficit to $20 million. They could have easily closed the gap by telling the Pacers "no" regarding the $15 million and demanded the Colts and/or Pacers kick in $5 million more. Instead of doing that our elected officials took the position that we should raise taxes so that we have nearly highest hospitality taxes in the country, which will undoubtedly further damage our convention business.

Governor Daniels had an opportunity to step up and demonstrate leadership. Instead he joined with Mayor Ballard to propose more of the same: taxes, taxes, and more taxes.


jabberdoodle said...

The overall plan is the same old Ballard taxes plus taxes upon taxes plan with THE most bizarre consolidation of building authorities imaginable. Methinks they are pulling money from the other building funds, but I have to look closer at those numbers to be sure how much. It certainly gives them the ability to hide the true cost of the convention/stadia/hospitality business in other expenses.

Its like pulling out the same old dusty go-nowhere plan and adding a psychotic twist to it.

Go figure.

Gary R. Welsh said...

I'd like to know what kind of bonus has been promised to Jim Morris, a big buddy of the guv's, if this deal goes through. Morris made off with over $6 million in the water company scam. I suppose this one should be good for at least another $1 million. He and the guv will have fun disussing what fools the citizenry of the city are to buy into this bullshit over a card game at Meridian Hills.

Paul K. Ogden said...

Dang it, Pat, you pick up on details that I don't even think of. Didn't think of them pulling money from the other building funds.

Doesn't it seem weird that they quickly found $27 million to close the gap? Of course they still want to give $15 million to the Pacers.

Gary, we always assume operating costs are $15 million at Conseco. But it would seem to me they would be less than 3/4 of the supposed $20 million for LOS which is a much larger facility.

Downtown Indy said...

You notice how everyone in the media regurgitates the '$47M deficit' line these days? When there's really 'just' a $32M deficit and a taxpayer-funded $15 Simon Gift card.

Paul K. Ogden said...

DI, I love the Simon gift card line! I may steal that.

Jon said...

Maybe that should be the CIB slogan, "the gift that keeps on giving."

Downtown Indy said...

Paul, now you can have your very own card.

Simon Gift Card

M Theory said...

These tax increases will not happen unless the city council approves them, right?

Paul K. Ogden said...

HFFT, right.

This is insane. They're raising taxes to give money to the Simons. That's bad enough but Simons are a big support of Ds and it will be Rs falling on the sword to support the higher taxes.