Ballard Poised To Raise Taxes Again--For The CIB

Our tax and spend mayor is coming back to the council yet again to seek more tax increases. Is he looking for money to rehire hundreds of police officer positions he's eliminated since becoming mayor as crime skyrockets? No. Is he looking for money to maintain our parks? No. Is he looking for money to fix crumbling infrastructure? No. He's planning to raise taxes for the only city agency that's so flush with money it has tens of millions of dollars to give away to a billionaire who doesn't even live in Indianapolis. That's right. While the mayor slashed funding for basic city services, he's going to make sure that the Capital Improvement Board has every dollar it needs to operate and then some, even if it means raising taxes.

After slashing the budgets of agencies other than the mayor's budget in retaliation for the city council passing a budget that imposed a $15 million payment-in-lieu of taxes on the CIB, which has a surplus of more than $65 million, to help pay for new police and firefighter recruit classes omitted in his own budget, Mayor Ballard wants to raise $7 million more in taxes through higher taxes on car rentals and tickets sold for admission to public events. The admissions tax, under Ballard's proposal, would be increased from 6% to 10% of ticket prices. The tax would apply to all events, not just Colts and Pacer games, as the Star implies in its story. Car rental taxes would be pushed up 2%, raising taxes paid on car rentals from 15% to 17%. Ballard defends the proposed tax increases, claiming they will be primarily paid by visitors to the City, which is the same thing he said when he supported raising the hotel tax three years ago to one of the highest rates in the country, 17%. Food and beverage taxes are also among the highest in the nation at 9%. Indianapolis ranks 8th on the list of the ten worst cities for taxes on visitors.

The convention trade business, which benefits the most from all the money the CIB spends, is opposed to the higher taxes, which it views as a deterrence to visitors coming to Indianapolis. Ballard, naturally, disagrees. "For the average customer who comes downtown for a convention, they ask what the overall cost of the experience is," Ballard said, rather than focusing on particular taxes. "And there's no disputing that this downtown is built up largely on visitor taxes." Although the CIB is the only city agency with a huge surplus currently, Ballard says he's worried about huge debt held by the agency on the horizon. "So, I'm just suggesting to you that we have to make sure -- whatever the numbers turn out to be -- we need to support (the CIB) to make sure that all this remains viable," Ballard told The Star.

The last tax increase we were told was necessary to pay for the operating expenses of the newly-opened Lucas Oil Stadium, which the CIB said it had found no revenue source to fund before it constructed the more than $700 million stadium. The Colts get to use the stadium rent-free, while the taxpayers pay the entire cost of operating the stadium. The billionaire owner of the Indiana Pacers, Herb Simon, cried foul and demanded his share. Despite claiming it needed the tax increase and state bailout in 2009 to maintain its solvency, the CIB quickly voted to give $33.5 million to the Pacers over a three-year period. Simon is now asking for permanent subsidies to pay the operating expenses for the Fieldhouse, which his team also gets to use rent-free, along with pocketing revenues derived from other events held at the facility.

Interestingly, the Colts now oppose raising the ticket tax because the team knows that its fans will simply be paying higher prices to attend its games in order to give more subsidies to Simon's Indiana Pacers. "It would be unfair to our ticket holders, particularly in these economic times, to be hit with an additional tax on the tickets -- and not just for us, but for all the events" at CIB venues, said Dan Emerson, the NFL team's vice president and general counsel. "It would be sending the wrong message." Not surprisingly, the Pacers had no comment.

Just like I predicted, last week's release of a report claiming tourism provided a $4 billion annual impact on the local economy, would be used to support higher taxes for more spending on the CIB. "A study released last week by Visit Indy estimated the economic impact of the tourism industry last year at $3.95 million (sic), up 10 percent from 2010," the Star reports. "An estimated 22 million visitors came to Indy -- two-thirds for leisure, the rest for business, conventions and meetings."

The CIB will vote at its next meeting on whether to seek the higher taxes, which must be approved by the council. Mayor Greg Ballard made no mention of raising these taxes when he sought re-election last year. Although he claimed public safety would be job one, he has reduced the number of police officers by more than three hundred and failed to fund news classes of police recruits for the past several years.

UPDATE: If you want to get your blood boiling, go listen to this interview at IndyPolitics with Ballard discussing why the CIB needs to continue giving subsidies to the Pacers on a permanent basis. He rejected the term bailout in reference to the subsidies being provided to the Pacers. "Bailout is not the right term," Ballard said. "They were running our building on their dime for ten years," Ballard said. "The Colts don't run Lucas Oil on their dime." "They're saying we can't run your building on our dime going forward." Ballard said the Simons treat the Fieldhouse "like a public asset" because they host hundreds of events there annually. He fails to mention that the Pacers get to keep the revenues generated from all of those events they host there and the fact the Pacers pay no rent for use of the building. Ballard claims his line-item veto that gutted the budget of other agencies, while keeping his own budget intact, avoided a fiscal cliff the federal government is now facing. That's a patent lie. His budget spent as much money as the budget passed by the Democratic-controlled council. The Democrats' budget simply chose to spend more money on public safety by tapping the CIB's cash reserves, while his budget allowed the CIB to keep more of its money to give away to the Pacers. Ballard also unbelievably clings to the notion that crime is dropping in the City despite evidence to the contrary.