Tuesday, April 14, 2009

Senate GOP Recklessly Approves Tax & Spend CIB Bailout Plan

The Indiana Senate had one objective today, and that was to find a way to tax every day citizens more to pay for the billionaire sports team owners' sports palaces. Sen. Luke Kenley modified his tax increase plan on second reading in the Senate to incorporate the changes recommended by Mayor Greg Ballard, which means dropping a food and beverage tax increase and a statewide alcohol tax in favor of a Marion County-only alcohol tax increase. It includes increases in the car rental tax, the admissions tax, parking fees, innkeeper's tax and an expansion of the professional sports development area to include the J.W. Marriott Hotel complex. Kenley graciously agreed to cap the state subsidy at $21 million a year and says the taxes will sunset after 10 years. Right. Kenley's only restructuring of the corrupt, self-dealing Capital Improvement Board of Managers of Marion County is to add two new board members, enlarging the current board from 9 to 11 members, to be appointed by Gov. Mitch Daniels. After a debate that lasted less than 30 minutes, Kenley's admendment was adopted on a voice vote. Members were not required to register a "yes" or "no" vote for the amendment.

Sen. Kenley accused opponents of the bailout of using the sports team owners as a distraction from the focus of rescuing Indianapolis' important convention business. He insisted all of the agreements entered into with the team owners were done so at arms length and by people just like him and other members of the Senate. Huh? Does this guy have any clue what has been happening with the CIB for the past decade. The CIB recorded one deficit budget after another over the past decade. I spoke to a City-County Councilor this week who said he/she knew nothing about the CIB's budget deficits until a few months ago. The CIB knew it didn't have the money to operate Lucas Oil Stadium, but it still went ahead and signed a long-term lease with Colts' owner Jim Irsay it couldn't afford to fund without borrowing more money or asking taxpayers to pay higher taxes. How can an unelected board be permitted to do this? And how can we reward their official misconduct and grossly negligent acts by raising another $48 milliion a year for them to spend for the benefit of the professional sports team owners? How can we be told that the Pacers are deserving of another $15 million a year in public subsidies? Why does the CIB have to provide the team owners with audited financial statements to prove its financial viability, but the CIB doesn't provide those same audited financial statements to the public? Why aren't the team owners required to share audited financial statements with the public? If we are being asked to invest billions over time in their private investments, shouldn't we have some way of evaluating the continued need of those owners to receive these subsidies year after year?

Other senators had amendments they believe will help smooth over taxpayers concerns. Sen. Pat Miller offered an amendment to require the CIB to provide some public accountability for its current financings. She offered another amendment to require the State Board of Accounts to audit the CIB (it's currently exempt), to allow the City-County Council more time to review its proposed bond issues and to post its financial information online. That's all well and good, but why should we have to pass a state law to require them to do what they should already be required to do as a governmental entity created by statute? Sen. Lindel Hume offered an amendment to expand the PSDA to include Circle Centre Mall. That's just fine and dandy for the Simons. They pay absolutely no rent to operate the mall we built for $320 million for their private gain and now we're going to give them every last drop of sales tax revenue the mall generates for the benefit of the CIB, which in turn will use the money to give more subsidies to the Simons' Pacer franchise, further increasing its value at the public's expense. Sen. Hume said the amendment would capture an additional $10 million for the CIB. Sen. Kenley opposed Hume's amendment, but he said the issue should be considered when the bill goes to conference committee. The Senate defeated Humes' amendment along party lines.

Sadly, Sen. Vi Simpson used her position as Senate Minority Leader for the Democrats to complain about the legislation's negative impact on two politically-connected alcohol distributors based in Marion County. To her credit, she cited a flaw in Kenley's Marion County-only alcohol tax in that distributors in Indiana cannot discriminate in the price it charges to its retailers. Because the tax is collected at the distributor level, she contended that these two distributors would pass the cost of the tax on to retailers in and outside Marion County. Sen. Simpson expressed no concern about the impact of higher taxes on taxpayers. Sen. Simpson expressed no concern about raising taxes to spend more money on subsidies for the state's wealthiest citizens. Does Sen. Simpson ever wonder why the Senate Republicans have no fear that the citizens of Indiana will ever elect a Democratic-controlled Senate. Simpson, by the way, has taken thousands of dollars in contributions from the Simons throughout her political career. She knows who butters her bread.

The most laughable point during the Senate debate came when Sen. Mike Young (R-Indianapolis) tried to put himself in the shoes of Joe Sixpack and sympathize with him being asked to pay higher taxes at the same time he said he supported the amendment because "I trust Sen. Kenley, and I trust Mayor Greg Ballard." Sen. Young, we don't trust either Sen. Kenley or Mayor Ballard. And now we don't trust you. You could obviously give a damn less about the taxpayers of Marion County and this state of Indiana. Your campaign rhetoric about being a fiscal conservate is one big fat lie. You voted to block the merger of your Wayne Township Fire Department into IFD, and now your self-dealing township trustee, whose job you want to protect, wants to raise property taxes to pay for your costly township fire department. Thanks for nothing. Until we give all of these unresponsive legislators the boot, we're going to get the shaft every time.


Gary R. Welsh said...

To give you an idea who Gov. Daniels will appoint to the CIB, let's look at who he appointed to the state's stadium authority:

David Frick, Chairman-Retired V.P. of Wellpoint, former deputy mayor

Charles Golden, Retired CFO of Lilly

John Mutz, Former Lt. Governor (he passed a gag rule when he ran Indianapolis' Water Works Board to keep an independent board member from speaking to the press)

Joe Loftus, Barnes & Thornburg (talk about conflict of interest)

Joe Perkins, Sr. Counsel to Cummins

John Thompson, CEO of Thompson Distribution

Linda Grass, Hancock County Auditor

Do you feel your interests are represented by any of these people? Do you have any confidence that Gov. Daniels would appoint anyone but a political insider just like all of these people are to look out for your interests at the CIB? Tell me another joke.

Citizen Kane said...

And the Ponzi scheme continues.

Had Enough Indy? said...

Wow ! You said a mouthful. And, quite well.

There are a couple of comments I'd like to make.

I hope the Councillor with whom you spoke is new to the Council and did not sit on the Municipal Corporations Committee during last year's budget hearings. Barney Levengood, Executive Director of the Convention Center and LOS, clearly said that the income from LOS was $7.7 million and the cost to operate $27 million and that the difference was being taken from their cash reserves. Upon questioning by Councillor Pryor, he stated that the CIB, the Mayor, and the Legislature were already looking over options to fix the operating budget deficit. If someone wants to view the whole hearing -- Channel 16 archives has it - Municipal Corporations Committee, August 25, 2009. The CIB is the second issue of the evening.

The CIB does not need to be enlarged, in my view. They all need to be fired. The good-old-boy-and-girl special interests need to be banned from the board.

The provisions to post the budgets etc online are all well and good, as is the auditing of the books - but that does little in reality to protect the public. Instead the Senators should have voted NO to the bailout. That would have protected the public.

By the way, the CIB budget is posted on the City Council webpages, as it has been for the last couple of years at least. The link: http://www.indy.gov/eGov/Council/Proposals/Pages/home.aspx scroll down to the bottom for all of the 2009 budgets.

Gary R. Welsh said...

Had Enough, The councilors knew there would be a dificit this year. What the councilor told me that he/she didn't know was that the CIB had been running deficits for the past decade. It's still a mystery where all of the money came from to fill the budget gap all those years. Were there that much in excess funds lying around somewhere to tap? How and why did those excess funds come to be? The audited financial statements that are prepared are not online. Why? The budget document to which you refer is missing so much information that it really is of little use.

Had Enough Indy? said...

My bad - the hearing date was August 25, 2008. Here's a link to the webpage with the list of that Committee's archived meetings:

Had Enough Indy? said...

AI - the information on the Council website does have some level of detail, and I find it useful. But, you are correct that it is useful only to a point. The Council does not have the authority to review/approve ALL of the CIB budget.

As for running a deficit for years -- according to the 2007 CIB annual report (the latest available)the whole budget ran a deficit from 2001 through 2004, but was positive from 2005 through 2007. There are no data prior to 2001 in the report.

There is no doubt that the CIB budget numbers are not clearly laid out, and transparency with that agency continues to be lacking. But, I sat through budget hearings the last couple of years and as long as the Councillors hear the magic words "we do not spend property tax dollars" they are content. This past year a number of members of the public pressed the point that all taxes are pulled from the same pockets and should be scrutinized to the same decree. I sincerely hope that this year, the budget hearings will really examine ALL tax revenue sources.

At the end of the day, the Council is the fiscal body of the City-County. It is their responsibility to pass budgets that move Indianapolis forward - not to rubber stamp what is placed before them.

Back to your points - the year end cash balances were considerable a two years ago, but have been coming down dramatically. It is an excellent question as to how they weathered the previous years.