Monday, February 09, 2009
CIB Offers Up Fake Budget Cuts: Will You Be Fooled?
The actions of our shameless CIB team are being carried out according to script. Build something you can't afford with a patchwork of new taxes. Pad the budget. Talk about the great economic benefits the community gets from a new stadium. Spring a huge budget shortfall on the public, blaming it on the tough economic times and changed circumstances. Pretend to make deep cuts to assuage the public. Tell us further cuts would risk the CIB's very operation. Coerce the legislature into approving a massive bailout in the form of tax increases and the shifting of current revenues away from other government uses. The billionaire sports team owners never sacrifice a dime. The self-dealing CIB board members are dutifully rewarded. And the taxpayers wind up holding the bag again. But this time, we're going to fight back and not let them get by with it.
The scenario described played out yet another scene of that just described at today's meeting of the Capital Improvement Board of Managers of Marion County. The Board announced to much fanfare today that it was slicing $6 million from its budget "by putting off planned maintenance and advertising, leaving positions unfilled and lowering costs on everything from legal fees to security contracts", or so writes the Star's Brendan O'Shaughnessy. “This sends a message that we're serious about making cuts,” said Bob Grand, the board’s president. “It’s important to start here in our negotiations with other stakeholders” like the city, state and teams that play in the stadiums the CIB operates. Grand even throws out this kind gesture of ruling out a property tax increase to solve the solution. That's a pretty easy gesture to make when one considers the fact that the CIB is not financed by property taxes.
=>As is it always seems to be the case, things are not as they appear. The CIB's 2009 budget is $110.2 million, which is $20 million over the CIB's 2007 budget, the last year it operated before the opening of Lucas Oil Stadium, a budget increase of 21%. The 2009 budget contained an astounding 75% increase in salaries from $12.4 million to $21.8 million. The CIB says it had to add 52 full-time employees since it opened Lucas Oil Stadium. That translates into an increased cost of over $180,000 per employee. The CIB's 2009 budget also added in an additional $2 million for advertising, utility costs nearly doubled to $8.1 million, repairs and maintenance costs tripled for the new stadium, topping $3.6 million. There's even $4.2 million in additional money for land and building alterations, renovations and repairs.
=>To pay for this higher budget, the CIB is drawing down more than $25 million from its reserves; otherwise, the CIB projects its revenues in 2009 will actually be over $8 million less than they were in 2007. Part of that relates to $4 million less in food concessions and $6 million in suite license fees given up to the Colts franchise. Tax receipts from the food and beverage tax, the innkeeper's tax and car rentals are expected to grow close to $4 million.
=>So what about this so-called $6 million in budget cuts? Barney Levengood told the Board that he would find the savings by cutting $1.1 million in salaries and benefits, $2.3 million in maintenance and repairs, $2.1 million from a combination of advertising cuts and utility, legal and insurance savings, and $250,000 from supplies (the supplies line item was also doubled in the 2009 budget).
=>But are these really cuts? Or did the CIB intentionally inflate its 2009 budget in anticipation of this day when it would have to make its case to the public to raise taxes to bail it out of this colossal financial mess, which I contend was intentionally planned by the CIB's leaders. The CIB knew it had no revenue stream to pay higher costs associated with the new stadium because of the sweetheart deal it negotiated with the Colts. Yet, the CIB went forward with the stadium plans anyway. Contrary to the efforts of some apologists for the Peterson administration, a downtown casino never factored into the equation because the proposal never gained currency in the legislature. The CIB has already conceded another $15 million in subsidies to the Pacers to match the Colts' sweetheart deal even before sitting down to negotiate a new lease agreement with the Simons. Notice that the taxpayers are always told about long-term leases secured by these deals but are never told about the clauses which allow for those long-term leases to be opened up and renegotiated by the team's owner in a much shorter period of time.
=>We saw this same scenario play out with Mayor Bart Peterson's last budget as mayor in 2007. Peterson, key members of his administration and Democratic City-County Council members deliberately misled the public about the City's budget to get what it wanted, a massive $90 million, 65% increase in the local option income tax. We have all kinds of laws which punish businesses and their executives, both criminally and civilly, for making misrepresentations to investors. Perhaps it's time that we passed truth in budgeting laws with teeth that will force our officials to swear under oath about the representations made to the public in their budgets and holding them liable for misrepresentations.
=>As this public debate over the CIB's finances goes forward, the public needs to ask probing questions of our public officials. You can't count on the media to do the job for us. Remember, the local news media has a vested interest in the success of the Pacers and the Colts. They generate significant ad revenues from professional sports teams in this community. It is in their financial interest to promote the talking points spoon fed to them by the high-paid public relations firms the Colts and Pacers hire to promote their agenda of forcing the public to dig deeper into their pockets to provide even larger subsidies to some of the state's wealthiest citizens. The time has come for the public to say enough is enough. The time has come for our community to tell the Simons and Irsays that we're tapped out, and that they will have to shoulder these added costs. We can't continue cutting money for our schools, parks, streets and sidewalks, libraries and police and at the same time hand out larger subsidies to these sports franchises. If they are the good citizens they claim to be, they should have no problem grasping this reality.