Tuesday, September 01, 2009

Cincy Has An Indy Problem

Well this should come as no surprise. Cincinnati is one of those cities that Indianapolis is always trying to outspend when it comes to subsidizing wealthy sports team owners and the convention industry. Cincy has dumped hundreds of millions in new stadiums for Major League baseball's Reds and the NFL's Bengals. Falling sales tax revenues that support debt service on the facilities has left Cincy with more than a $13 million deficit. Voters there, unlike Indianapolis, have twice been allowed to vote on supporting higher sales taxes for the stadiums and both times voted down the tax increases. Indianapolis residents will find this promise similar:

Both stadiums are funded with proceeds from a half-cent sales tax increase approved by county voters in 1996. As part of that campaign, officials promised to roll back a portion of the property tax, and vowed to make annual payments to the Cincinnati Public Schools to compensate for the decrease in taxes. Both the obligations account for big chunks of the stadium funding, along with debt service.

Hamilton Co. officials in Ohio over-estimated the expected sales tax collections from the tax increase. To address that shortfall, local officials restructured the bond payment schedule and deferred payments to the Cincy schools. According to The Bond Buyer, the City now hopes to renegotiate lease agreements with the Reds and the Bengals and continue deferring payments to the school district. And if that doesn't work, they'll tap into the money slated for rolling back property taxes.


Jeff Cox said...

Saying the voters of Cincinnati and/or Hamilton County, OH voted against tax increases for Paul Brown Stadium and Great American Ballpark is a bit misleading unless you also point out that those same voters approved the taxes in the first place (though his support for those taxes ultimately cost county commissioner Bob Beddinghaus his job). I realize that point is made in the excerpt, but since it can be seen as going against the grain of your general position on this issue, it's probably something that should be addressed in your comments.

Gary R. Welsh said...

No correction is needed. The original post makes it clear that the voters approved the original sales tax but later voted down two separate attempts to raise it again to support the stadiums.

Gary R. Welsh said...

And the state legislature and the city council here have never trusted the issue of whether taxes should be increased for the CIB to the voters.

Doug said...

I have an irrational bias against Cincinnati -- particularly Cincinnati sports -- from my days at Miami University, so this story made me pretty happy.

I came to school from Indiana and was pretty well neutral at first, but I found the Cleveland fans were a whole lot more palatable to me than the Cincinnati fans. The Cleveland fans were die hard while the Cincinnati fans were fair weather.

In any case, I suspect at least some part of the revenue shortfall has to do with the poor performance of the Reds and, to an even greater extent, the Bengals over the last 20 years. From 1990 - 2008, the Bengals are 110-193-1. (.361 winning percentage.)

artfuggins said...

At least Cincy has a plan even if it is a bad one. Ballard has no plan to get us out of this CIB mess even with the help of his new best friend, Jackie Nytes.

Gary R. Welsh said...

Doug, It's the declining sales tax revenues for the City and not poor ticket sales to the Reds and Bengals games that is to blame. It looks like the claimed economic boost didn't materialize. It never does if you actually conduct an objective economic impact analysis. These stadiums always cost the public many times more than they ever generate in economic benefits to the community.