Saturday, February 21, 2009

ICVA Should Be Looking Elsewhere To Fund Budget

Just how much should the public pay to finance the Indianapolis Convention and Visitors Association (ICVA)? That's a question which seems to be begged by a story in today's IBJ by Anthony Schoettle where the ICVA's Don Welsh makes the case for his organization. Currently, the CIB gives the ICVA over $11 million annually, which represents 70% of its annual budget. In other words, we spend about $20 for each room night booked by conventions. Although the ICVA is supposed to be under contract with the CIB to oversee the city's convention industry, the CIB also budgeted another $2.5 million itself this year for advertising, which is an increase of nearly $2 million from earlier budgets. The CIB announced it was cutting that budget as part of its efforts to trim $6 million from its budget this year.

One of the reasons the CIB (i.e., Mayor Greg Ballard) is seeking another huge tax increase now is to continue its current funding of the ICVA and contribute another $3-4 million, bringing the taxpayers' contribution to the ICVA to $15 million annually. The ICVA's Welsh promises that the increased funding will pay for itself through higher bookings for conventions. One might ask why area hotels and restaurants aren't interested in kicking in extra money to the ICVA if the result will be 150,000-200,000 more convention room nights.

Schoettle mentions once again Bob Cockrum's silly idea of imposing a new income tax on persons who work in Marion County but live outside of it. Those are taxpayers, incidentally, who are already paying local income taxes to the counties where they live. Cockrum's son, by the way, has a financial interest in the new Marriott Hotel being built adjacent to the convention center at a cost of nearly $65 million to taxpayers. Councilor Joanne Sanders also supports the additional funding for the ICVA. “What the ICVA has been able to do with a relatively small budget and small staff has really been phenomenal,” said City-County Councilor Joanne Sanders, Democratic minority leader. “We lose sight of the fact that this is an economic development issue as much as a taxing issue. These initiatives bring jobs in the hotel, restaurant and other hospitality and tourism sectors in our city.” Sanders is currently employed as an International Representative for the International Alliance of Theatrical Stage Employees (IATSE), the same union which represents workers at the convention center.

Frankly, I consider the ICVA's insistence that it be given even more money insulting. The taxpayers built the convention center and have paid to expand it a couple of times and now are shelling out $200 million more to expand it yet again. We spent $320 million, plus interest costs, to build Circle Centre Mall adjacent to the convention center. We've spent hundreds of millions more subsidizing hotel projects and other capital improvements in and around the convention center. We've spent more than a billion more on new stadiums. And it's still not enough. Had enough?


Citizen Kane said...

Now look at the site below to see the small percentage of total wages (average wages also) generated by all of this government largess, noting that the accommodation, food, arts, entertainment, recreation and retail sales categories are obviously not just generated from tourism and conventions.

Note the large discrepancies between percentage of jobs in the county and percentage of earnings for these sectors, obviously resulting in the fairly low to obscenely low wages. In this type of Ponzi scheme, the taxpayers are the losers, even before it collapses.

Gary R. Welsh said...

The hospitality industry is full of workers without health insurance. When they have serious health problems, they wind up at Wishard and we pick up the tab. Many of these businesses fail to properly report and pay taxes on the tip earnings of their employees, which represents most of their pay in many cases.

Gary R. Welsh said...

According to those statistics, citizen kane, hospitality workers represent 7.3% of the workforce but only a little over 2% of the wages earned by the county's workforce.

thundermutt said...

AI, the income-distribution numbers could be a bit skewed by all the high-priced lawyers and doctors (MD and PhD) who work in Indianapolis. This is, after all, the state's center of finance, insurance, real estate, medicine, and pharmaceutical research. But many of those folks live outside the county and don't pay our 1.65% income tax. (See below)

Someone has to empty trash cans, wash sheets and mop floors, and they don't make $100K a year. More like $20K. But they spend every penny they make locally on rent, cars, groceries and clothes. So a higher percentage of those wages get recycled immediately in the local economy than of yours and mine.

And finally...the argument about taxing commuters isn't "silly". High-income commuters rely on streets, sewers, police, and fire protection that you and I pay local property and income taxes to build up and maintain. Their own local taxes go to plow out their cul-de-sacs when it snows. Our local taxes go to dig out the arteries they use to get to work, while we dig ourselves out of side streets. They don't call Carmel or Fishers cops and firefighters if they have an accident at 38th and Fall Creek or Kessler and Keystone...they call ours.

Paul K. Ogden said...

Thunder, for every wealthy lawyer in town, I can point to about 3 that are just barely scratching by. So they more than offset each other.