Wednesday, January 16, 2013

Council Committee Passes Tax Increases It Won't Pay To Fuel More Spending By The CIB

Get Microsoft Silverlight Councilor Brian Mahern pleaded with his colleagues who serve on the Administration & Finance Committee chaired by Councilor Angela Mansfield to postpone consideration of the proposed tax increase in the admissions tax on ticketed events to for-profit events in the county. Mahern made the case that the 67% increase in the admissions tax, which is expected to raise $4.5 million annually for the CIB in additional revenues, will not be paid by those who are advocating for its increase, namely the mayor, council members, CIB members and other members of the downtown mafia who regularly are comped free tickets to Colts and Pacer games, as well as concerts and other events that are subject to the tax. He has requested the CIB to identify how many tickets to events are not subject to the tax becaue they're controlled by the team owners, the CIB or the Mayor's Office, which claims it needed more time to compile that information. Mahern noted that the $10 million the CIB had given to billionaire Herb Simon's Indiana Pacers recently was made without any public input or so much as a specific appropriation by the council for said purpose. Nobody representing the Pacers appeared to comment on the proposed tax increase, unlike the Indianapolis Colts, which offered testimony in opposition to the increase, although it was noted that not even billionaire Jim Irsay and his guests at football games are required to pay the admissions tax. Councilor Mansfield and Council President Maggie Lewis, both of whom despise Mahern, were not interested in learning about who all doesn't have to pay the tax they were insisting was no big deal since people can choose whether or not to attend one of these events.

In this next clip, CIB President Ann Lathrop, who has repeatedly provided false testimony to the public concerning the CIB's past budgets, defended the free ticket program for elites, although she pleaded ignorance about Irsay not having to pay the admissions tax. She knows the Colts owner controls the tickets and to whom they're given. The team gets all of the revenues from the Colts tickets, and she knows admissions taxes are not paid on tickets comped by the team owners. I guess I'm not surprised she would try to fein ignorance to the public on this point given her past antics of dishonesty. In one incredibly stupid exchange, Council President Lewis, in reference to the free tickets she and other councilors and members of the downtown mafia get for free, asked, "Our attending your games doesn't effect your bottom line." Of course not, Lathrop assures. The big elephant in the room ignored here is the fact that the free tickets are a form of bribery that has been offered over the years to council members and other key community leaders to go along with the longest running Ponzi scheme in the history of Indianapolis that is the CIB. Yes, it does affect the CIB's bottom line. The more freebies they hand out to these self-serving folks, the more the taxpaying public gets its pockets picked to support their activities at the expense of other basic city services. Lathrop acknowledged that VisitIndy uses the free tickets to woo decision-makers regarding conventions, including the FFA and National Firefighters. In fact, if the public saw just how lavishly they entertain some of these folks in an effort to get them to host their conventions in Indianapolis, they would have to pick their jaws up off of the floor. The organization members might not look too kindly either on just how much free entertainment their leadership accepts from VisitIndy in making their decisions to host conventions here. Get Microsoft Silverlight In the next clip, Councilor Mahern responds to the dismissive attitude of the committee members towards holding off action on the proposed tax increase until the CIB produces the information he requested about all the free tickets that are not subject to the admissions tax. Get Microsoft Silverlight In the following clip, Colts VP Dan Emerson pleads with council members not to approve the 67% increase in the admissions tax. He explains to members that he believes we are at a tipping point with people facing higher taxes and living costs at the same time their disposable income is declining. The team has not raised its ticket prices since 2009, while other teams throughout the NFL have been forced to lower ticket prices to counter declining demand for tickets. For the high-end tickets to Colts games, the tax increase will mean $200/year more per ticket according to Emerson. He could not have been more clear that raising the admissions tax will result in fewer ticket sales. The bottom line he contends is that attendance to NFL games since 2007 has been on the decline as more and more people choose to stay home and watch the games on TV. The Colts were able to nearly sell out the entire season to season ticket-holders untll the past two years when that number has dropped to about 88%. He also said that while he was sympathetic with the CIB's desire to raise more revenues, he insists their financials woes are of their own making, not that of the Colts. Emerson was later chastised by several council members for opposing the tax increase, while the Pacers avoided any questioning by avoiding the meeting altogether. Council President Lewis suggested the Colts should eat the cost of the admissions tax increase rather than passing it on to ticket holders. The Pacers want the tax increase because nobody wants to attend their games anymore and they're looking for more public handouts from the CIB to cover its nut, which will be assured by the passage of these tax increases. Get Microsoft Silverlight The auto rental tax will also be increased to raise an additional $2.2 million annually. Despite the administration's claims that this tax is only paid by out-of-town visitors, industry officials made clear that most of the tax is paid by local residents who occasionally rent vehicles.

Here's the bottom line. Together, these two taxes will raise about $6.7 million annually. The CIB is pledging to share 25% of those new revenues with the City to help defray public safety costs, or about $1.75 million. The actual added public safety costs to support the CIB's activities are far in excess of that amount. If those higher taxes produce higher than expected revenues, in no event will the CIB share more than $3 million with the City to defray public safety expenses. The City's structual deficit is supposedly $46 million. The CIB, which currently has a $65 million cash reserve, plans to use all of the new revenues for operating expenses. The original council approved budget provided for a $15 million contribution from the CIB this year in the form of a PILOT without any new tax increases. The CIB claimed such a hit would threaten its ability to pay its debts. Yet the CIB is using all of the new revenues for operating expenses, not debt service. The only thing the public gets from these two new taxes is a few crumbs to pay for its under-funded public safety services, while the CIB gets millions more in additional tax dollars to continue to give away to the Pacers, VisitIndy or whoever else is in line for more public subsidies at the expense of the general public. It was particularly pathetic to hear Councilor Jeff Miller publicly thank the CIB for agreeing to share a few crumbs with the City. It ain't too hard to see that what we have here is a bad case of the tail wagging the dog. In his short time on the council, Miller has already forgotten who it is that he was elected to represent. Because it's bad public policy and bad fiscal policy, the committee unanimously approved the two tax increases. When you elect a bunch of dolts to the council who are more interested in what's in it for them than what's in it for the public, this is the crappy result you get.


Had Enough Indy? said...

Is disclosure of free tickets to sporting events required of our Councillors?

Gary R. Welsh said...

Pat, They are suppose to report all gift above the threshold amount. Some report the free tickets they receive; others don't. There are no consequences for lying on those financial disclosure forms. Just ask Monroe Gray.