Tuesday, April 23, 2013

Indianapolis Star Uses Tortured Logic to Claim the CIB is Giving Money to the City

The Star reports:
The City-County Council tonight signed off on a pact that’s expected to provide more than $11.6 million to public safety agencies and introduced other budget-related measures.

The agreement on the public safety payments — which will come from the Capital Improvement Board — and the homestead tax credit study were among pieces of a long-term bipartisan budget deal struck in January between Republican Mayor Greg Ballard and leaders of the Democratic-majority council.
They’re still discussing ways to cut back this year’s budget and to close an expected $35 million deficit next year.
In the meantime, the CIB, which runs the city’s sports venues and convention center, has agreed to give the police and fire departments all of an estimated $6.7 million in first-year proceeds from recent increases to taxes on event admissions and auto rentals in Marion County.
It’s also transferring $5 million to city coffers in a one-for-one swap involving a development fund.
After the first year of the tax increases, the CIB will give the city’s public safety agencies one-quarter of proceeds, up to $3 million annually.
Reporter Jon Murray really dropped the ball on this story.  Let's review what happened.  A few months ago, at the request of the CIB and the Mayor's Office, the Indianapolis City-County Council approved raising the admission's tax by 67% and the local car rental tax by 50%.  The first year that money goes to the City.   After that, 75% of the revenue from the two taxes goes to the CIB.

Yet how is it reported?  Astonishingly that the CIB is agreeing to give money to the City.  The only way this tortured logic works is if there is a presumption that the CIB is somehow entitled to have both of those taxes maxed out.   In fact, the legislature said those taxes should only be increased if needed to pay back a state loan it agreed to extend to the CIB when it was asking for a bailout a few years ago.  Even though it does not need money to repay the loan, the CIB had the Council max out the taxes anyway.  Then the CIB turned around and gave $2 million to billionaire Jim Irsay to construct two new suites in the five year old Lucas Oil Stadium.

Oh, and that $5 million the CIB is transferring to the City?  That is simply matched with the City picking up $5 million of the CIB's expense with respect to improvements at a parking garage.   There is no net money going from the CIB to the City.  It's just a shell game.

Bottom line, the CIB is not contributing a dime to the City more than it ever has..   You wouldn't know that from the story though.

1 comment:

Jeff Cox said...

"Tortured logic?" Paul, you should be happy the Star used any logic at all ...