Indianapolis Mayor Ballard Proposes Tax On Downtown Workers; Warning to Republicans on Indianapolis City County Council

Indianapolis Mayor Greg Ballard has changed his Capital Improvement Board bailout proposal so many times that perhaps missed this past week was a significant change. Before Ballard proposed increases in rental tax car taxes, hotel/motel tax and admissions taxes on tickets to events at CIB venues, like Lucas Oil Stadium, Conseco Fieldhouse and Victory Field.

Under this scenario, spokesperson for the Mayor set out to sell the tax increases as not impacting local residents. It was a disingenuous argument from the beginning. Studies show that rental cars are rented mostly by local residents not out-of-towners. And while the hotel/motel tax is not paid directly by local residents, it most assuredly is felt by the workers in the form of stagnant wages and lost jobs as visitors opt against renting Indianapolis hotel rooms due to the increased cost of those rooms. Indianapolis is already nearing the highest combined sales/innkeeper tax in the country. That means Indianapolis becomes a target to having its convention business stolen as competing cities point out Indianapolis' high taxes as a reason to move the convention to their city.

At a budget committee hearing last week Mayor Ballard announced he was ditching the Governor Daniels' proposal regarding more CIB cuts and instead included proposals to gain more tax revenue, including a new proposal: allowing the city the power to charge fees at Downtown parking garages, which City Controller David Reynolds said could generate between $1 million and $1.5 million for the city each year.

As a matter of political strategy, I have long warned my fellow Republicans that the Mayor's idea that voters going into 2011 are going to distinguish between different types of taxes and conclude that a tax that supposedly just affects visitors is okay, is almost certain to fail. People hear the word "tax" and everything afterwards that falls on deaf ears. What is doubly worse for these tax increases is what the taxpayers perceive their taxes are going for. No matter matter how hard the Mayor and his people spin, the public perceives the taxes are not to save convention business, but instead are to bail out the CIB for excessive subsidies for professional sports. And you know what? They are right.

What makes the Mayor's position that this not about professional sports even more obviously disingenuous is the fact that at the same time he proposes raising taxes by millions of dollars, he also proposes giving the billionaire Simons brothers $15 million more of our tax dollars to pay the operating costs on Conseco Fieldhouse, a building from which their team, the Indiana Pacers, get 100% of the revenue. Even though the Pacers have no leverage whatsoever to demand this $15 million, the City and the CIB are bound and determined to give it to them anyway, and to raise taxes in order to be able to do it. That speaks boatloads about how the business elites have come to dominate this city over the interests of the taxpayers.

Now with the parking tax, Mayor Ballard has dropped the pretense that the tax increases won't affect local taxpayers. The proposed tax increases for downtown parking garages will directly impact those garages and the downtown workers who park there. The ruse is over.

As the legislature nears the end of the special session, most likely the issue of these tax increases will come back to the Indianapolis City County Council. I would strongly warn my fellow Republicans on the Council: If you vote for those tax increases, you not only are ensuring a Democratic Mayor and a Democratic majority in the council in 2011, you are ensuring that the Republicans will be written off into minority status in the Marion County for decades to come. No one is going to believe the Republican Party is a party of lower taxes if we increase taxes to bail out the CIB, whose deficit due almost entirely to excessive professional sports subsidies. Mayor Ballard has made it clear he intends to commit political suicide on the CIB bailout by pushing for higher taxes despite overwhelming public opposition. Do not follow his lead. Do not drink the Kool-Aid of higher taxes for professional sports.