Tuesday, June 30, 2009

Ballard Blasts Legislators for Leaving $12 Million CIB Shortfall; Ogden Suggests Where Mayor Can Find $15 Million Without Raising Taxes

WRTV-TV is reporting that Indianapolis Mayor Greg Ballard is outraged over the actions of the Indiana General Assembly which did not give him the power to raise taxes like he had sought. The Mayor had proposed rental car tax increases, increases in the hotel tax, increases in the admissions tax and a tax on downtown parking garages as a way of bridging the supposed $47 million operating deficit the Capital Improvement Board is facing.

According to the Channel 6 story:
Mayor Greg Ballard sounded off against state legislators Tuesday for what he called their failure to adequately address the Capital Improvement Board's $47 million operating deficit as the clock ticks toward a midnight state budget deadline.

Indianapolis needs legislative help to plug the projected deficit, and Ballard said he is frustrated that lawmakers' latest plan would raise only $25 million annually.

Ballard sought an increase of admissions, car rental and hotel taxes to pay for the operation of Lucas Oil Stadium and other Indianapolis sporting venues. (Note: Actually the Mayor also ask for authority to impose parking fees on downtown garages as another way to generate revenue for the CIB.)

Lawmakers only addressed the hotel tax increase, from 9 percent to 10 percent, in their latest proposal.

That increase, combined with $10 million in operating cuts, would cut into the funding shortfall, but would still leave a $12 million gap.

"It's problematic. It's disappointing, and frankly, the state's the loser. It's the state sales tax revenue really at stake," Ballard said. "I was very clear we need to get over this three or four-year hump. Then, we could re-look at it. If we can't do it with what they are making available to us, we are going to have to make some serious decisions."

Ballard admitted that he doesn't have a Plan B, and said the city will be forced to work with what it has. The mayor said he's concerned that the city's tourism efforts will suffer.
Okay, let's do the math for the Mayor. You start at $47 million. Deduct $10 million in already identified CIB budget cuts. That leaves $37 million. Then you deduct another $25 million in revenue from an increased hotel tax and a loan from the state.

That leaves the $12 million shortfall the Mayor is complaining about. Hmm, where can the CIB get say $15 million without costing the taxpayers a dime, any cuts in CIB operations, or any loss of convention business? How about this... do not agree to have the taxpayers pick up the $15 million in operating costs on Conseco Fieldhouse, a building in which the taxpayers get 0% of the revenue.

The Pacers are entering the 10 year anniversary of their 20 year contract. That 10 year anniversary gives the team the right to get out of the contract early IF they pay a penalty of $50 million to $125 million dollars. The Pacers are never going to do that. They have no leverage that would require the CIB to reopen that deal and give the billionaire Simon brothers $15 million more per year of our money.

Why do we take the position that if the Pacers or Colts believe they cut a bad deal, it is okay to let them renegotiate it midstream? However, if it is the taxpayers getting screwed by a deal cut with the Colts or Pacers, we'll that is just tough luck.

Not only would foregoing the $15 million solve the Mayor's $12 million complained of shortfall, it would also eliminate the need for Indianapolis to raise the hotel tax at all. The Mayor complains about lost convention business. Does he not realize that raising the hotel tax, to give us nearly the highest combined sales/hotel tax in the country, will do a heck of a lot more to hurt convention business than giving the Simon brothers $15 million more per year for their Pacers franchise?

See Advance Indiana's take on this story by going here.


Downtown Indy said...

I do not see what's so hard about telling the Simons, 'Sorry, but we just don't have the money for that.'

Well, it probably would mean giving up some hefty political contributions.

M Theory said...

Downtown, that should not be hard to do because the Simons are on record stating they did not ask for the $15 million.

Paul K. Ogden said...


Actually the Simons give mostly to Democrats. So the Republicans are going to vote en masse for a tax increase that will chiefly benefit the Democrats #1 campaign contributor, the Simons. This is a surreal time we are living in.

varangianguard said...

The Mayor doesn't seem to react well to change. He has ahold of a Plan A and is going to chew it to pieces like a terrier. Too bad nobody up there has the ability to come up with a Plan B either. One might have supposed that contingency planning would have been one of the Mayor's leadership skills.

Guess not. Disappointing.

jabberdoodle said...

Wouldn't it be nice to see everyone in government work as hard to fix budget shortfalls in areas that affect regular citizens' quality of life? Say to keep up our parks or to secure a reliable public transit system?

Instead we find ourselves living in this Alice in Wonderland place where $15M is deeded over to obscenely wealthy sports team owners even before a contract is reopened for negotiations. And, in this Alice in Wonderland place, we are told it is all for the sake of hard working maids and busboys whose salaries average $18K per year. That is a non-living wage, of course, but we simply cannot do any more for them than we already are - given the economic times we live in.

Do you think 25 floors is too high to allow enough oxygen for clear human thought processes?