Friday, February 1, 2019

Leadership of Both Parties on Indianapolis Council Want Taxpayers to Foot the Bill for Soccer Stadium

One should never surprised by our Indianapolis City-County Council whenever it comes to corporate welfare.  On the Council, regardless of which party controls, there is always a bipartisan majority more than willing to hand taxpayer money to corporate interests.  Fortunately, the Indiana General Assembly on occasion will put a brake on the eagerness of local officials to raise taxes or redirect existing tax revenue for the latest giveaway.  The Indianapolis Business Journal reports on the latest effort of our councilors to give away our hard earned dollars:
A bipartisan group of city-county councilors has called for a committee hearing on legislation that would use state and local tax revenue for a $150 million, 20,000-seat soccer stadium, part of a larger mixed-use development proposed by the owner of the
Indy Eleven.
... 
But the councilors—including President Vop Osili, a Democrat, and Republican Leader Mike McQuillen—stopped short of endorsing the stadium project, saying they want the opportunity to "carefully and thoughtfully engage in discussions" about the proposal and the future of soccer in Indianapolis. 
“We’re not advocating for anything other than the opportunity for local government to have a say in this,” Osili told IBJ on Thursday. 
A letter signed by Osili and McQuillen, as well as the council's majority leader, Maggie Lewis, and its vice president, Zach Adamson, says, "Our ability to act on this, however, is dependent on SB 543 being provided a committee hearing and the prospect of passage by the Indiana General Assembly."
...
The project would be a public-private partnership, with private investors chipping in about $400 million for the residential, retail and commercial parts of the project. The stadium would be publicly funded, with bonds paid off using revenue from property, income, sales and other taxes generated within the development. SB 543 would establish that funding mechanism, authorizing a Professional Sports Development Area to capture the state taxes and allows the city to create a tax-increment financing district to capture local revenue.
By the way, the term "public-private partnership" means that taxpayers assume the cost and risk of the corporate welfare project while the private company reaps the benefits from the partnership.

6 comments:

True Republican said...

So did Ballard ever get his cricket park?

Flogger said...

Bipartisan only seems to exist when Corporate Welfare is needed. We have for all intents and purposes a Republicrat Party when costs need to be socialized and profits privatized. The mixed use development is just a smokescreen for the real goal of a brand new stadium.

When you leave downtown you enter into a near Third World environment where streets are potholed and cheaply patched, trash accumulates along the public right a ways. You hardly ever see police car on patrol these days.

Unknown said...

The proposal as you post it, Paul, makes clear that the tax revenue captured is future, new tax revenue that will never be generated at all unless the project is built. Right? So why oppose it?

Paul K. Ogden said...

Anon, because that's not the way it works. What happens in these types of districts as well as TIF districts is that they borrow against anticipated tax revenue increases. The problem is that those revenue increases often are insufficient to pay for the money borrowed. (Most TIF districts in Marion County are, in fact, running in the red.) Not surprisingly, the creditors lending money to government still expect to get pad, which means dipping into the pre-development tax base.

The second problem is that the government services paid for with taxes are not static. When you increase the amount of economic activity in an area, more services have to be provided. But "capturing" the tax revenue, keeps the money coming into the coffers static and below what is necessary to pay the government's bills. That means, of course, government has to use other tax revenue to pay for those services in the district.

The notion that these types of districts are cost-free ways of funding development is pure fantasy.

Anonymous said...

remember what Rex Early wrote in his book about renting a civic leader. I am so surprised that we have so many Indiana legislatures that like soccer.

Btownmoon said...

In addition to Paul's response, the "new" tax revenue is new only if the Eleven Park creates new business or draws business from outside the State. Otherwise, there is an impact on both State and local tax revenues. For example, businesses or residents that move from outside to inside the Eleven Park development are not "new" but State and local tax revenues are reduced while tax revenues inside Eleven Park are diverted to pay for the Stadium.

People make similar arguments that the new stadium will be used for high school, college and maybe concerts. But those events are played somewhere today and fans already spend money to attend. Granted, the new stadium may attract more fans to attend but let's understand the true impacts.