Wednesday, April 01, 2009

Hospitality Taxes Will Be Highest In The Nation

Mayor Greg Ballard, with Sen. Luke Kenley at his side, said this evening that the bailout of the Capital Improvement Board is essential to save 66,000 hospitality-related jobs in Central Indiana. In order to raise an additional $47.4 million to cover the CIB's shortfall, Mayor Greg Ballard has signed off on a plan that will hike Indianapolis' 9% tax on food and beverages and its 16% innkeeper's tax. When the two taxes are combined, Indianapolis will have the distinction of having the highest hospitality taxes in the nation, even topping the City of Chicago. In other words, we're going to tax our hospitality businesses out of the convention business so that Colts' owner Jim Irsay and Pacers' owners Herb and Mel Simon can continue to get a free ride.

Ballard and Kenley claim the Pacers and Colts are each kicking in $5 million, but that is nothing more than a figment of their imagination. The Pacers will agree to settle for less than the $15 million in costs the team had expected the CIB to pick up, and we'll chalk that up as a contribution from the team. How's that for horse trading? The Colts will let us keep some of the revenues from non-game events held at Lucas Oil Stadium and we'll thank them for it. Actually, believe it or not, the Colts haven't agreed to that component of the proposal according to WRTV. "They haven't told me that they're participating yet, but I'm hopeful that they will," said CIB President Bob Grand.

In addition to the hospitality taxes, the City will increase its admissions taxes to both sports and nongame-related events, and the state alcohol tax will double. The alcohol tax will raise a little more than $40 million, but only $8 million of that amount will be used to fund the CIB's bailout. The rest will fund pork barrel projects for cities across the state. Let's just call that economic stimulus light.

Mayor Ballard obviously doesn't appreciate the negative impact this decision will have on the ICVA's ability to attract new conventions to the City, just as it is dumping more than $200 million in a major expansion of the convention center at the site of the former RCA Dome. The City is now on the fast track to declaring bankruptcy. This will become the proverbial straw that broke the camel's back.

21 comments:

Downtown Indy said...

I can still remember back when the Indiana sales tax was implemented. 'Just a small 2% tax' no big deal.

That's how things work, a little here, a little there. Before long it adds up to a bunch. And it's NEVER enough.

Don't you wonder why raising tax rates, particularly on sales and use, it necessary since the basis on which they are computed goes up itself? Hotels, food, ticket prices, rental cars - they all cost a lot more than they did just a year ago.

So the tax has a built-in increment and still that's not enough. But the rate needs to be jacked up too, for some reason.

Legalized Ponzi-ism. That's all it is.

indyernie said...

I need to quit drinking beer anyway and the wife has a reason to start cooking again.

Jon said...

Why is the answer always we need more taxes? Where is the mayor who promised to roll back taxes now?
Mayor if you raise taxes on food again you better prepare for the law of unintended consequences, namely people like myself who will simply refuse to dine in Marion County. Even if my family dines in the doughnut counties those counties taxes are capped at 500k per year so I stand a very good chance of not contributing any money to the Simons or Irsays of this world.

Mike Kole said...

Well, who will be the next mayor, beginning in 2012?

Concerned Taxpayer said...

Welcome to Obamaland.

I'm Nancy Pelosi, and I'll be your guide for a small gratuity.

Downtown Indy said...

This is as much a Herb and Mel Simon bailout as a CIB bailout. Such a deal, they just saved $10M a year with the stroke of a pen.

Zappatista said...

CT, what does Ballard's politics have to do with Obama? Well, besides the whole tax and spend thing............!

Patriot Paul said...

The City County Council has to see and pass this stuff. I recommend Hoosier taxpayers be that that evening as we were in the past. Make a stand!

Diana Vice said...

I'll bring a sack lunch next time I visit Marion County.

Paul K. Ogden said...

PP,

The CCC only votes on a few of these tax increases.

Paul

HOOSIERS FOR FAIR TAX said...

Mayor Ballard obviously doesn't appreciate the negative impact this decision will have on his chances for re-election.

HOOSIERS FOR FAIR TAX said...

I have friends who make beer and hard ciders. I think I'll start chipping in for ingredients and help them. Heck you don't have to buy beer from distributors. I've got a kegerator!

Sir Hailstone said...

The City County Council has to see and pass this stuff

Actually if the State passes it, I don't believe the CCC has any say over it. I know one GOP councilor was at a club meeting asking their State Rep to PLEASE keep this hot potato out of the CCC.

If the State were to kick this to the CCC with the 15-14-1 this will set up a very interesting series of events.

Sir Hailstone said...

Well, who will be the next mayor, beginning in 2012?

Good question. Only ones I hear about on the other side are Melina Kennedy and Frank Anderson.

Vox Populi said...

This bailout brought to you by the Mayor Greg Ballard and the Marion County Republican Party.

I hope you guys are ready for Mayor Melina Kennedy.

artfuggins said...

Sir Hailstone, there are many names on the Dem side waiting to take on High Taxes Ballard....the two you mentioned will not be the candidate..look for a big name with lots of money....Ballard has betrayed a lot of people. Just for the record, I did not vote for him...

Paul K. Ogden said...

Sir Hail,

Well it certainly won't be Frank Anderson. He has too many issues related to jails that could be brought up.

Ballard is dead in the water though. I don't think he has a clue that this ended any chance he had of re-election.

Patriot Paul said...

"Authorizing the City-County Council to raise the food and beverage tax in Marion County to 2.25 percent from the current 2 percent; the admission tax on tickets to 10 percent from the current 6 percent; and the innkeepers tax on hotel rooms to 9 percent from the current 8 percent."
http://www.indystar.com/article/20090402/NEWS05/904020451

HOOSIERS FOR FAIR TAX said...

OGDEN FOR MAYOR!

guy77money said...

Here's another problem with the Colt's getting there up front cost for events that do not relate to the Colts. How many organizers have looked else where to have an event at Lucas Oil. I suspect there are no deals to get events to use the stadium when it comes to the Colts unless Irsay ok's it.

Vox Populi said...

Artfuggins... if you're implying the Democratic candidate will be Woody Myers, I suggest he run for something back home in California.