Monday, April 29, 2013

CIB's Recent $2 Million Gift to the Colts Owner is Cited as Reason Legislature Voted to Sunset CIB Taxes

In the story that I've followed on this blog, the Indiana General Assembly voted to sunset the CIB tax increases passed earlier this year by the Indianapolis City-County Council.

To refresh the readers' memory, the Council voted earlier this year to raise the admissions tax on tickets at CIB venues by 67% and the local car rental tax by 50%. The first year, this additional revenue is to go to public safety. After the first year, 75% of the money goes to the CIB's coffers.

Sen. Michael Young (R. Indianapolis)
Members of the General Assembly had complained that when they gave the CIB the authority to raise these taxes in the 2009 bailout legislation they passed, the taxes were only to be increased if necessary to pay back a state loan.  Fast forwarding to 2013, while the CIB didn't need the money to repay the loan, the CIB wanted the taxes maxed out anyway.  Members of the Council dutifully complied voting in a pre-arranged vote where exactly 8 Democrats and 8 Republicans voted for each of the taxes.

In response to the Council's action taken on behalf of the CIB, Sen. Michael Young (R-Indianapolis) authored legislation to sunset the taxes at 10 years, the length of time the CIB had to repay the state loan.  While the measure easily passed the Senate, it wasn't heard in the Senate.  It was, however, added in as part of the budget which passed Friday night.

Jon Murray of the Indianapolis Star reports on what transpired:
State lawmakers have revived a bid to put limits on recent Marion County admissions and auto rental tax increases that were enacted locally to support the Capital Improvement Board.

That’s the city agency that runs its sports venues and convention center, and the leader of the legislature’s crackdown says the CIB’s decision this month to pay for a $2 million luxury suite expansion at Lucas Oil Stadium only strengthened his case.

In the closing hours of the General Assembly session that ended early Saturday morning, language putting 10-year sunsets on the twin tax hikes was inserted into the two-year state budget bill by a conference committee. The tax increases are expected to raise $6.7 million a year initially, with most of it going to the CIB after the first year.


Young said his goal was to get the tax limits approved by session’s end because he wasn’t convinced the recent increases — allowed by a 2009 state bailout package for the then-ailing CIB — were necessary for the CIB’s long-term survival.

Only providing more evidence that the CIB is flush with cash, he said, was news of the CIB’s agreement to add two luxury suites and two kitchens to the stadium, at the request of the Indianapolis Colts.

He also cited longstanding discussions about a potential CIB contribution to help pay for a multimillion-dollar renovation of the Natatorium at Indiana University-Purdue University Indianapolis; a bipartisan budget deal between Indianapolis Mayor Greg Ballard and City-County Council leaders in January that called for the city budget to receive a portion of the new tax proceeds; and council Democrats’ failed bid last fall to extract a $15 million one-time tax from the CIB, eying its high reserve fund.
“I think it made the case that they didn’t need these tax increases,” Young said of the CIB. “They had the cash. ... The rest of the state didn’t want to pay for helping the CIB out any more than they had to.
The lengthy article then goes on to detail members of the administration complaining about the immediate the impact the sunsetting of the taxes would have on the CIB, including the ability to borrow money on that tax revenue..  It's so hard to feel sorry for the leadership of an entity that is constantly lying to the public in order to get its hands on more of our tax dollars.  While the sunsetting of the tax increases is unfortunately 10 years down the road, hopefully it is a first step in the General Assembly taking much-needed action to reign in the CIB.


Jon said...

Under the heading of spin is everything;

"CIB officials call improvements to the stadium necessary to keep it in top-notch competitive shape."

"Mayoral Chief of Staff Ryan Vaughn said the tax sunsets, despite not taking effect for 10 years, would hamper the city's ability to plan for projects that keep its portfolio of sports and convention facilities in top condition."

Most laughable part of the Star article; "It upsets the business model we've built the CIB around."

Seems their model is still working; increase taxes and fees and give the money to the billionaire owners.

Paul K. Ogden said...

Yep, Jon, that's the business model.

Unknown said...

I think Mahern has the right idea, our councilors need to fess up about all the perks they receive and they need to be reporting those perks as gifts and / or income.
Then we need to lobby our state reps to either sunset the CIB tax increases or better yet sunset the CIB. To get more info please visit