Wednesday, February 13, 2013

Bill Sunsetting Indianapolis Tax Increases for CIB Clears the Senate

A Senate Bill to sunset the CIB tax increases recently passed by the Indianapolis City-County Council yesterday passed out of the Senate 37-12 and is on the way to the House.

A couple weeks ago, the Indianapolis City-County Council by not coincidentally a vote of 8 Republicans and 8 Democrats on each tax proposal, voted to increase the admissions tax on events held at facilities run by the Capital Improvement Board (CIB) by 67% and the local car rental tax by 50%.  In 2009, when the Indiana General Assembly gave the authority to raise these two taxes to the Council, they expressly indicated that the taxes would only be increased if necessary to pay back a state loan of $18 million for which principle payments are due beginning this year..  Four years later the CIB is flush with cash and the decision was made to raise the taxes anyway, in fact to max out the taxes, and pour 75% of the new revenue into the CIB's coffers.  The increased taxes, which are expected to raise $6.7 million a year, will elevate Indianapolis to the third highest visitor taxes in the country, behind only Chicago and New York City.

In a story that appears that only my blog is following, Senator Michael Young (R-Indianapolis) took notice of what was going on on the other side of Market Street and introduced a bill, Senate Bill 90, to sunset the taxes after 10 years, the period of time the City has to pay back the loan, for which principal payments are due beginning this year. 

Indianapolis and CIB officials were none too pleased with Young's bill.. They testified testified against the bill in committee and urged its defeat.  But the bill passed 8-2.

What is most interesting is the Senators who lined up to co-author the bill.  Brent Waltz, Mike Delph, Michael Crider, Pat Miller, Scott Schneider, as well as the previously mentioned Michael Young, are all Republicans with portions or all of their district in Marion County.  That all these Republicans are willing to stand up and oppose tax increases pushed by Republican Mayor Greg Ballard and the CIB filled with his appointments is a significant development.

It remains to be seen whether SB 90 will garner as much support from the Marion County Republicans as it moves to the House.


Gary R. Welsh said...

This is just a sideshow, Paul. The bill has no teeth since it doesn't sunset the bill for another 10 years. By that time, nobody will even remember any of what was in dispute at the time the 10-year sunset date was enacted. Why even let these people insult our intelligence by trying to pretend they're doing something to crack down on the excesses and abuses of the CIB when nothing of the sort is happening.

Paul K. Ogden said...

Unfortunately the legislature won't pass anything stronger. I'd much rather have the whole loaf and repeal the tax increases or even get rid of the CIB altogether, but getting a few slices of bread is better than getting nothing.

The most significant development though is we have virtually every Marion County Republican State Senator directly going against the wishes of the Republican Mayor of Indianapolis who wants permanent tax increases. That's an enormous contrast with our local Republican councilors.

Gary R. Welsh said...

It's not Ballard's problem. He will be long gone before the taxes expire. This is all pretense on the part of the sponsors. They're actually doing the CIB's lobbyists a favor. Lobbyists love sunset laws that affect their clients because it creates yet another billing opportunity.

MacReady said...

I agree that the big issue here is that the State Republican Officeholders are willing to buck the mayor. I would love to be a fly on the wall when Ballard comes in up Pence's conversations behind closed doors.

I also agree they're probably trying to get us to take our eyes off the ball...

guy77money said...

Hey they have all met the mayor and I am sure they realize that he doesn't run the city. As Rex Early stated in his book, we are all in a heap of trouble when the law firms in Marion County start calling the shots. Ballard is just a figure head when it comes to the mayors office.