Tuesday, February 5, 2013

Senate Committee Sends City Message Regarding CIB Tax Increases; Committee Votes to Sunset Taxes Pursuant to 2009 Agreement

Just last week, the Indianapolis City-County Council passed a 50% increase in the local rental car tax and 67% increase in the admissions tax, a tax that applies to all tickets to events at CIB facilities, including Lucas Oil Stadium, Bankers Life Fieldhouse, Victory Stadium, and the Convention Center.  After the first year, the tax increases, which are projected to raise $6.7 million s a year, go 75% to the operations of the Capital Improvement Board, the entity that runs the City's sports facilities and convention center.

The ability to increase the taxes was made possible as a result of CIB legislation passed in 2009.  In exchange for an $18 million state loan as part of that 2009 bailout, the Indiana General Assembly gave the Council the authority to raise the local rental car tax up to 6% and the admissions tax up to 10% for the purpose of repaying the state loan.  A few years later, Indianapolis Mayor Greg Ballard, despite the fact the CIB had made a miraculous financial recovery (actually the CIB fudged its finances going into the 2009 legislative session) and had plenty of resources to repay the 2009 state loan, pushed to max out the taxes anyway.   A week ago last Monday, the Indianapolis Council passed the tax increases with exactly 8 Republicans and 8 Democrats voting for the two measures, an apparent coordinated effort between the parties to raise taxes in order to generate more money for the CIB to hand over to owners of professional sports teams.

Legislators on the other side of Market Street were none too pleased by last week's antics from Indianapolis city-county government.  Republican Senators Mike Young and Brent Waltz, both of whom have most of their districts located in Indianapolis, authored Senate Bill 90 to sunset the CIB tax increases at 10 years, the same length of time that the City has to repay the loan.  (Only interest has been paid thus far.)  Despite pleas from City and CIB lobbyists that the tax increases should be permanent, the Indiana Senate Tax and Fiscal Policy Committee by a vote of 8-2 voted to pass the bill.  During the discussion over the bill, Senator Young reminded City and CIB lobbyists of the 2009 promise regarding the purpose of the tax increases and indicated they should be held to that promise.

1 comment:

Gary R. Welsh said...

I'll wait until the conclusion of the legislative session, Paul, to determine how serious the legislature is about this issue. I distinctly recall the legislature giving the impression they weren't going to meet the CIB's bail out demands but in the end gave them everything they wanted and then some. That state loan got tacked on at the last minute as an additional part of the deal. Those guys get a lot of free tickets given to them as well. I