|The CIB operates Bankers Life Fieldhouse among other facilities.|
To recap, a week ago last Monday an ordinances was introduced in the Indianapolis City-County Council to raise the car rental tax from 4% to 6%, raising the total taxes paid on rental cars from 15% to 17%. Another ordinance was introduced to raise the county admissions tax from 6% to 10%. According to estimates, the tax increases in the first year alone will raise $6.7 million dollars.
In a deal between Republican Mayor Greg Ballard and Democratic leadership of the Council, it was announced that, after the first year, 75% of the revenue from the tax increases would go to the Capital Improvement Board with the remaining 25% going to public safety
When the original deal was brokered in 2009, the legislature gave the council the authority to raise the car rental and admissions tax. However, according to the source, those taxes were only to be increased if necessary to pay back the $18 million loan that was part of the 2009 deal. Interest payments have only been paid thus far on the loan. Beginning this year, the City will begin paying back the principal as well. Repayments are scheduled to take 10 years, hence the reason for the sunset after one decade.
The source said he doubted the CIB needed the tax increases to repay the state loan and that, since the 2009 deal was cut, the CIB's finances proved to be in much better shape than the pessimistic projects CIB officials gave the legislature nearly four years ago. Certainly, according to the source, the legislature never agreed for these tax increases to be diverted to public safety.
At $6.7 million dollars per year, it shouldn't take long to pay off the $18 million state loan. While the ten year sunset is good, I think it could easily be shortened to five years. Better yet, the taxes shouldn't be raised at all. Indianapolis already has some of the highest visitor taxes in the country and is quickly earning a reputation of being less than friendly when it comes to the tax burden imposed on those who come to the city.