Friday, April 10, 2009

Crawford Floats Downtown Casino To Bail Out CIB

You knew this one was coming at some point in the CIB bailout discussions. Rep. Bill Crawford (D-Indianapolis) wants a downtown casino (with slots only) to be operated jointly by the nearby racinos in Shelbyville and Anderson to help fill the CIB's $47 million deficit. The casino, alone, won't be enough to get the job done. A 10% tax on the casino will raise $20.5 million annually. Crawford relies on an increase of 1% in the auto rental tax from 6% to 7% and a 1% increase in the hotel tax from 9% to 10%. Together, these measures would raise $33 million, which is still $15 million short of what the CIB needs. Crawford suggests expanding the professional sports development area to include Circle Centre Mall or an increase in the food and beverage tax as additional revenue generators.

In an earlier analysis I conducted of the CIB's current board members, I pointed out that two of the board members have a direct interest in establishing a downtown casino. Lobbyist Doug Brown represents the Shelbyville casino. CIB Vice President Pat Early's father, Rex, reportedly invested in the original Shelbyville horse race track. Restaurant owner Craig Huse owns an interest in Centaur, which owns the Hoosier Park racino. And, of course, we can't forget about CIB President Bob Grand's big conflict. He represents Simon Property Group and the Pacers. The Simons own Claypool Court where Hoosier Park operates an off-track-betting parlor.

The Star's Jon Murray reports that Mayor Greg Ballard is not necessarily opposed to a downtown casino. "The mayor has said that Downtown gaming is not a preferred part of our solution for this fiscal crisis, but given the gravity of the crisis, we simply can't rule anything like this out as part of the solution," said Robert Vane, Ballard's deputy chief of staff. "It's a serious proposal that deserves serious thought, and we'll definitely give it such," Vane said. Murray notes that Ballard is expected to announce his own plan next week, just days before the General Assembly is scheduled to adjourn.

Meanwhile, the CIB goes through the motions of making additional cuts. CIB Executive Director Barney Levengood says that more than 80 CIB employees will be asked to take a 6-day furlough from work this year to save money. The CIB plans to draw down a reserve fund by $17 million to pay off an emergency loan it got from the state last year. Again, the public is being deprived of any thorough explanation of the situation which led to the CIB taking out this emergency loan without our knowledge last year. Further, the CIB has a $34 million deferred loan it owes to investors in the Circle Centre Mall, including the Indianapolis Star. And there is another $26 million debt which matures later this year, which the CIB will be required to refinance.

10 comments:

guy77money said...

Hmm bankruptcy seems to be the only intelligent solution. Look for the legislature to propose and pass some sort of bail out for the CIB the last or next to last day they of the session. I suspect they will wait till the last minute. If there is nothing done then what?

Concerned Taxpayer said...

I guess Crawford finally figured out how to get a bigger cut out of a casino than he does the pea-shake houses.

HOOSIERS FOR FAIR TAX said...

This goes to show you how utterly lazy and unthinking Bill Crawford really is.

The only solution to this mess is for the CIB to file bankruptcy, get all of its business in the sunshine, renegotiate every contract, and start fresh.

I know said...

If the Ways and Means committee, the Mayor and the General Assembly make a second State Contract Casino it will open up pandoras box!

The Governor fully supports the Cook's and Ferguson's French Lick operation. He attended the unveiling and was quoted as saying, " I thought this over and I told Donald Trump he was fired".

The Horse Tracks had to give French Lick a percentage of their income to keep everyone from howling. An Indy Casino will pit the CIB, the Simon's and Pacers and Irsay and the Colts against the Cook's. The Governor will have to either support the Mayor of Indianapolis, the Pacers, the CIB and the Colts or the friends from French Lick. What a headache he will have then.

The State Contracted venture in French Lick defaulted on their Bonds in April of 2008 (look it up in Moody's and Standard and Poors). It is poorly rated a second time as the Indy Star has reported and the State supported a FORTY year contract and gave all the revenue, except the taxes, the building, the parking garage, the land and the furnishings to the operators.

May the games begin. Friends will have to choose sides now. What will happen to the investors money in French Lick when the Indy Casino puts it out of business? What will happen when the friends and investors in French Lick want bailed out like the CIB, the Pacers and the Colts?

Someone is going to get their feelings hurt and their checkbook severely impacted. When that happens the friends and family plan of the wealthy having the chance to write their own contract, the AG approve it, make it for 40 Years and have a State Appointed Committee member get the contract three and one half months after resigning from the committee will come tumbling out!

Who will mind the store with a State Contract with either the CIB or the Mayor? Indiana has done a very poor job so far!

Shorebreak said...

I've got an idea - how about a walking tax? If the commoners want to walk in Indy, they simply pay a small fee with, say, a meter at every crosswalk perhaps? We can add the cost of the meter to their property taxes. Every time one of them crosses a street, charge 'em a penny. It'll give us a good reason to issue more jaywalking tickets too. Maybe we can add all jaywalking revenue to Irsay's pot.

Downtown Indy said...

Melyssa, that's probably the biggest hangup for them - the fear of all their dirty laundry seeing the light of day.

artfuggins said...

How about a toll bridge at the Marion County-Hamilton County lines then the tax dodgers who move there can still pay their fair share?

Jon said...

Haven't we heard enough of this bunk? Tax this, tax that and guess what this scenario will be repeated every time an owner whines we are not competitive. Bankruptcy is the only sane answer.

spooknp said...

How about a toll bridge at the Marion County-Hamilton County lines then the tax dodgers who move there can still pay their fair share?

As long as there are tolls on both the southbound and northbound lanes, I am all for it!!

Shorebreak said...

Here's the mentality that I just love:

1)City/County raises taxes.

2)Resident of City/County is upset because he/she didn't want higher taxes, and because cost of living is increasing without equivalent wage increase.

3)Resident sees nicer, safer City/County nearby with lower taxes and better schools, so resident decides to act frugally and move to community with better government.

4)Some nutjob on internet labels overtaxed, frugal residents as "tax dodgers" when poor city/county government forces residents to make sound decisions.

artfuggins, you are blind.