Pacers To CIB: Pay Up Or Else

Simon Property Group may be hoarding money to buy up additional real estate bargains in a down market, the Pacers may be paying $15 million to Jamaal Tinsley to just stay away from the locker room until his contract runs out and Bren Simon may have her $28 million third or fourth home in Bel-Air, but when it comes to Indianapolis taxpayers, you'll just have to fork over at least $15 million to cover the costs of the Simons' NBA franchise or they'll take the team to another city. That's essentially what CIB Vice President Pat Early reported back to the Board today, or that's what CIB President Bob Grand, an attorney for the Simons, told Early to tell the rest of the Board and the public since ethical considerations force him to let someone else do the talking for the CIB. The Star's Brendan O'Shaughnessy says this following today's meeting:

Pat Early, the board's vice president, said the Pacers are losing about $30 million this season and have lost money every year but two of the 28 years the Simons have owned the team.

Early said the Pacers cannot continue to shoulder the $15 million per year operating costs of Conseco Fieldhouse. He said the team has not threatened to leave but that there is a good chance it will leave or shut down if the CIB does not assume those costs.

“If we are unable to do this, we’re really jeopardizing the health of Downtown,” Early said. He called the Fieldhouse and Lucas Oil Stadium the bookends of a $4 billion annual tourism and convention industry.

“If one of those bookends goes down, who knows what’s next.”

Early said that the city still would have to shoulder the Fieldhouse’s operating costs if the Pacers didn’t play there and estimated that they would be nearly the same. He said the team acknowledges responsibility for its players’ problems off the court but cannot control a collective bargaining agreement that hurts small-market cities.

“It’s important that everyone understands the Pacers can’t participate any more financially,” Early said of talk that the city cover only a portion of the operating costs. “They are already participating with millions of dollars every year. We are going to have to find a solution.”

Notice that Early states as fact that the Pacers cannot continue to pay up to $15 million in operating costs for Conseco Fieldhouse and that the franchise will lose $30 million this year and has lot money in every year but two that the Simons have owned the Pacers. That is what the Pacers' Jim Morris told the CIB. Early, who is a CPA by trade, has not reviewed audited financial statements of the Pacers and made them available for public inspection to ascertain the veracity of that claim. Early is also not a good negotiator. He has already conceded the major point of contention with the Pacers before the two parties even sit down and specifically discuss renegotiation of the lease. Also, notice how these leases always give the team owners a chance to come back and renegotiate on more favorable terms after certain intervals when we're told at the time of their execution that we've entered into a long-term lease with them. But when circumstances change to the disadvantage of the taxpayers, we're always told "a deal is a deal."

Let's face it, most professional sports team owners claim their franchises are losing money, but whenever one of them goes up for sale, there is always a willing buyer ready to step up and pay the top dollar. The real reason the Simons are demanding that these costs be borne by taxpayers is because of the deal the CIB entered into with Colts' owner Jim Irsay, which requires the CIB to absorb all of the operating and maintenance expenses for Lucas Oil Stadium. Word of the Simons' reaction to that sweetheart deal and expectation that the CIB would renegotiate its lease on similar terms at the 10-year mark of its current lease next year was leaked to the Indianapolis Business Journal as a prelude to these current discussions. There is also speculation that the Simons may want to sell the Pacers. If the CIB agrees to pick up these costs, the potential selling price of the Pacers could easily be bolstered by $100 million or more.

The Simons could care less what the taxpaying public thinks of their demands; otherwise, they would have hired players who respect the community and fans who support them and don't have continuous brushes with the law. The Simons have nobody but themselves to blame for declining ticket and broadcast revenues--a direct result of the precipitous drop in community and fan support for their franchise. The Simons instead are banking on the fact that they've showered millions in campaign contributions to various Indiana politicians over the past decade and when they tell one of them to jump, he or she will ask, "How high?".

The CIB earlier announced a little more than $6 million in fake budget cuts. Why are they fake? When you increase your annual budget $20 million and then say you're reducing the amount of that increase, you're not cutting your budget. The CIB claims that Lucas Oil Stadium, even though it is brand new, costs $20 million more to operate and maintain than the RCA Dome, a 25-year-old building that has already been demolished to make way for an expanded convention center. The CIB has never substantiated this claim. Just as predicted, the CIB also announced a round of cuts to the local arts, a move intended to put pressure on more people in the community to support a tax increase for the CIB. The 13% reduction, or $400,000 cut, affects grants for the Arts Council, Black Expo and cultural tourism. The CIB also announced a cut from its super secret emergency maintenance fund. The IBJ says, "The board also agreed to eliminate for one year a maintenance fund that contains $960,000 for emergency repairs to the buildings it manages."

These cuts will not come close to closing the CIB's budget deficit, which has been a moving target for the past few months. To make up that difference, the CIB will push higher taxes on food and beverages, even though Indianapolis' 9% tax already makes it one of the highest in the country, and a higher admissions tax to at least all events at the CIB facilities. "Raising hospitality taxes would first need approval from the General Assembly and the City-County Council," the IBJ reports. "A 1-percentage-point increase in food-and-beverage, innkeeper’s and admissions taxes would raise more than $24 million annually but rank the city as one of the costliest in the nation for the taxes." There has been some talk of an effort to extend the tax to other events, such as the symphony and theaters, which are currently beyond the CIB's reach. Notice again how there is a complete cover up of the funding debacle the CIB faces this year after using variable rate interest bonds and interest rate swap notes instead of fixed, long-term bonds to borrow money. Let's also not forget that the CIB is quietly trying to get local businesses, which loaned $34 million from the dividends they earned on the taxpayer-funded Circle Centre Mall to build Conseco Fieldhouse, to forgive those loans. This includes distressed financial institutions which received federal TARP money and the Indianapolis Star.

The Star editorialized today against a backroom deal at the State House to bail out the CIB (without mentioning the millions it is owed by the CIB). "City and state leaders must avoid an all-too-common Statehouse scenario: a last minute, behind-closed-doors deal that cuts the public out of the decision-making," reads the editorial. "Mayor Greg Ballard could help head off that storyline by soon identifying his preferred choices for eliminating the deficit," the editorial adds. No, the politicians won't tell the taxpayers what they want to do straight up. They've already been wined and dined by the high-priced lobbyists who advocate on behalf of the Colts and the Pacers and who have enjoyed those generous campaign contributions Irsay and the Simons have given them. They'll just get the politicians to stick their backroom deal on to the state budget so they can tell us that they couldn't vote against all of those other good things in the state budget because of that one bad apple.

Brown's Secondary Employment Proposal Gets A Second Look

When I applauded Councilor Vernon Brown's proposal last year to set up a secondary employment unit to supervise off-duty police work within IMPD and collect fees from private security companies who utilize their services, my fellow Republicans and the Ballard administration dismissed the idea. In the wake of the OmniSource raid a couple of weeks back where more than 50 off-duty police officers worked, the Ballard administration is taking a second look at Brown's proposal. Republican council members (who worked for the police department) and the police union opposed it, claiming it would make hiring off-duty police officers uneconomical. No, it means that private security firms aren't going to make such huge profits from renting out our cops and their police cruisers for their personal gain. The Star's Brendan O'Shaughnessy reports on the Ballard administration's change of heart:

Under Brown's proposal, the new unit, which would be a division of the city's Public Safety Department, would charge an hourly fee of $5 whenever a uniformed officer was hired to provide security at a business and $10 per hour if the job included the use of a patrol car. The company would still pay the officer separately, typically about $25 to $35 an hour.

At this point, no rates have been set. But Brown, a Democrat, said similar systems in place across the country allow cities to recoup the expenses associated with using patrol cars and other city property.

The Indianapolis Metropolitan Police Department has issued off-duty work permits to about 850 of its 1,700 officers. These officers typically take jobs providing security in hospitals and schools and outside bars and nightclubs. Under existing policy, officers cannot work at strip clubs, adult bookstores or any business involved in "illegal activity." Supervisors must approve all off-duty jobs . . .

Brown's proposal to provide greater oversight of moonlighting officers never advanced beyond committee, but he said there is more interest in it now in the aftermath of the raid last month at OmniSource, a metal-recycling company. . .

Scott Newman, the city's public safety director, met with Brown and other council members even before the raid about the potential of reviving Brown's proposal in some way.

Shareholder Derivative Suit Charges Durham And Others With Self-Dealing

Indianapolis entrepreneur Timothy Durham and two other defendants have been slapped with a lawsuit filed on behalf of several minority shareholders of a publicly-traded holding company effectively controlled by Durham in a Dallas, Texas civil court, alleging breach of fiduciary duty and self-dealing. The holding company, CLST Holdings, Inc., formerly owned and operated CellStar, a wireless telecommunications business. After the company proved less than profitable, the shareholders adopted a plan to convert it to a holding company and liquidate its assets in 2007. Upon the sale of the assets, the shareholders anticipated that the cash would be distributed to the shareholders and the holding company dissolved. That's not what happened. [See this 2007 story in the IBJ for background concerning Durham and CellStar and the role Brightpoint played in the transactions leading up to Durham gaining control CLST.]

Durham, who holds a 15% stake in the company, successfully nominated a slate of board candidates, including himself, Robert Kaiser and David Tornek, and took charge of the newly-created holding company. The lawsuit alleges that the controlling group sold some of the assets to Indianapolis-based Brightpoint, a company in which Durham has held a financial interest in the past. Instead of distributing about $60 million in cash to the shareholders in accordance with the plan approved by the shareholders, the suit alleges that Durham and the other directors engaged in various self-dealing transactions. Specifically, it alleges that Durham and his co-defendants sold off significant corporate assets at an unfair price, Durham and his associates used the holding company's liquidity to purchase questionable assets in which Durham held an interest, established restricted stock benefits for Durham and Kaiser, and initiated a poison pill plan to defeat a tender offer by certain minority shareholders to purchase the holding company's outstanding stock.

The lawsuit alleges that Durham and his co-defendants engaged in transactions in which they stood on both sides of the transaction, obtained personal benefits for themselves, engaged in self-dealing and avoided providing shareholders with pertinent information regarding these transactions. The lawsuit notes that Kaiser received a change in control payment of $3.6 million before resigning as President and CEO of CellStar and then becoming a paid consultant and director of the holding company controlled by Durham. The suit notes that substantially all of CellStar's assets were sold to Metropolis Corp., a wholly-owned subsidiary of Brightpoint. Durham once owned a significant beneficial interest in Brightpoint through Obsidian Enterprises, Inc., a company he owns. One of the co-defendants, Tornek, co-owns with Durham a restaurant in South Beach, Florida called Touch.

The lawsuit alleges that Durham pledged to fulfill a promise to carry out the liquidation and winding up of the affairs of the holding company when he and his slate of board candidates sought control of the company but reneged on that promise once they took control. The suit notes that Durham is acting as interim CEO of National Lampoon after Durham's long-time friend, Dan Laikin, brother to Brightpoint CEO Bob Laikin, was indicted by the government on charges he manipulated the price of National Lampoon's stock. The suit charges that Durham and his controlling directors have failed to have a single shareholders meeting since obtaining control of CLST.

According to the suit, CLST used most of the $60 million in liquid assets to purchase $41 million in "home improvement consumer receivables" for $41 million from FCC Investment Trust, a company in which Durham held an interest. The suit charges that Durham and his controlling directors did not disclose any specific information regarding the purchased receivables, including the identity of the original holder of the receivables or the age of the receivables. In another transaction, Durham caused the holding company to acquire for $2 million "certain receivables, installment sales contracts and related assets", again failing to disclose pertinent information about the assets, such as the balance, interest rate or age of the receivables. The holding company also became a borrower of up to $50 million under one of the purchase agreements, of which $15 million is for incurring the purchase of additional receivables. CLST is guaranteed to incur exorbitant fees whether it borrows money under the credit agreement according to the suit. In only one transaction did the holding company disclose that Durham was a seller of assets purchased by the company. Approximately $3.6 million in receivables, installment sales contracts and related assets were purchased from FFC, a company owned by Durham and James Cochran. At the same time, stock transactions authorized by CLST allowed Durham to elevate his ownership in the company from a 5% stake to a 15% stake. The suit also accuses Durham of using an attorney who had personally represented him in various matters as the attorney for the company.

When a group of shareholders represented by Red Oak Partners tendered an offer earlier this year to acquire the outstanding shares of stock for the company, Durham and his controlling directors responded with a shareholders rights plan to deter them, a so-called poison pill. In response, Red Oak withdrew its tender offer and instituted this derivative lawsuit, along with other minority shareholders. The suit charges that a directors' share purchase plan approved without the consent of the shareholders allows the controlling directors to purchase nearly double the amount of shares of common stock existing at the time of plan's approval. The lawsuit seeks to undo that directors' share purchase plan, along with the purchase agreements entered into by the controlling directors. The minority shareholders also seek the appointment of a conservator to oversee the implementation of the dissolution plan originally adopted by the shareholders, among other remedies.

Durham has been a prominent figure on the Indianapolis business and political scene in recent years. He chaired the campaign finance committee of the Marion County Republican Party until recently. Durham is also the single largest contributor to Marion County Prosecutor Carl Brizzi's campaign committee, having contributed in excess of $100,000 to him. Brizzi and Durham are close friends. The Republican members of the City-County Council caucused in Durham's offices to pick their leadership team following the 2007 city elections. Durham's sex life became the focus of local media attention when the Indianapolis Star reported on his R-rated MySpace page and the photographs he posted there of wild pajama parties he has thrown at his palatial mansion in Fortville with scantily-clad Pentouse models.

The Death Of The Marion County Republican Party?

The days when GOP faithful would pack into Primo's banquet hall on the south side for a county GOP convention are long gone. Fewer than 200 committeepersons, many of whom were appointed and not elected, gathered this morning to re-elect the same team of leaders led by Ice Miller attorney Tom John. Although Marion County Prosecutor Carl Brizzi enthusiastically nominated John for the post of party chair, most objective observers believe Brizzi's own hopes of holding on to that office for another term in 2010 if he seeks re-election are remote due to the beating his reputation as a tough prosecutor has taken over the last four years and the continued resurgence of Marion County Democrats.

In 2006, Republicans lost every countywide race save the prosecutor's race by about 8 percentage points. Brizzi, despite having a well-financed campaign against a Democratic candidate with questionable qualifications, managed to squeak out a win by just a few thousand votes. In 2008, the countywide results were nothing short of disastrous. Democrats swept every race by a margin of 60-40%. Despite having the strongest candidate in the nation, John Pless, for the job of county coroner and all of the scandal and incompetence that plagued former Coroner Kenneth Ackles' office, not even Pless managed better than 40% of the vote. Even worse, party leaders in a rather bizarre move made absolutely no issue of Ackles' controversial tenure in that office during the campaign. In addition to the countywide losses, the Republicans lost two state representative seats and lost a third open seat viewed as being competitive. It has reached the point that the only legislative districts Republicans can win in Marion County are those which overlap with the Republican-rich suburban counties.

Shockingly, Marion County Republicans outspent their Democratic counterparts by better than two-to-one last year. According to an analysis prepared by Indiana Legislative Insight's Ed Feigenbaum, the Marion County GOP spent more than $1.1 million in 2008 compared to the $567,000 spent by the Marion County Democrats. The party ended the year with barely $2,400 in the bank.

Ironically, the GOP fared better in 2007 when it was outspent by the Democrats by nearly three-to-one, a little more than $1 million for the Democrats to the GOP's $375,000. In that year, Republicans rode a wave of grassroots, taxpayer discontentment to oust Mayor Bart Peterson and Democrat-control of the city-county council. Sadly, the GOP has antagonized and alienated many of the grassroots supporters, including this writer, who helped build that grassroots campaign. GOP Chairman Tom John discouraged Republicans with deep pockets from contributing to Ballard's campaign and only supported one of the four at-large City-County Council candidates. One of the party's at-large council members, Ed Coleman, recently left the party and became a Libertarian in a disagreement over the party's reluctance to tackle out-of-control spending by the Capital Improvement Board of Managers, among other issues.

In 2006, another recent year where the GOP fared badly, the party outspent Democrats by a huge margin, $1.6 million to $686,000. What is clear is that the only year the party fared well, 2007, was when public discontent with skyrocketing property taxes and a 65% increase in the income tax, along with ethical issues involving CCC President Monroe Gray and lack of transparency in presenting and adopting a budget, overwhelmed Democrats. In just a little more than one short year, the GOP has squandered those issues. Serious ethical problems are brewing with two of the GOP's top council leaders, Ryan Vaughn and Lincoln Plowman. Ballard has basically turned to the same old country club crowd for advice on running his office and declined an opportunity to open up the books and investigate serious problems with the water company and the Capital Improvement Board, effectively assuming the baggage the Peterson administration left behind. Ballard is now seeking double-digit increases in water and sewer rates and higher taxes for the CIB to further subsidize the billionaire sports team owners. Ballard has also appointed a slew of conflicted individuals and lobbyists to key boards and abandoned the aggressive ethics reform proposals he touted during his 2007 campaign. Grassroots supporters have been completely shut out of his administration and have since come to a point of disillusion that he is unlikely to win their support back, effectively dooming his re-election prospects in 2011.

The future is not at all bright for the Marion County GOP. Part of that problem relates to the shifting demographics of the county. People fed up with rising taxes, crime and poor services, are fleeing to the wealthier suburban counties where good schools are plentiful and taxes and crime are lower. Those migrating out of the county are leaving behind a growing poor and minority population heavily dependent on government services. The immediate demise facing the party, however, must be blamed on its failure to keep its promises and govern differently than the Democrats. A majority of Marion County residents voted to put Republicans back in control of City Hall because they wanted change. Instead, all they are hearing is an echo of the past.

Sectional Champions

My nephews, Lucas and Logan Eitel, helped lead their team to the 2009 Sectional Championship title last night. The Marshall Lions defeated Paris 62-30 to capture the Sectional Title in Illinois' Class 2A boys high school basketball play. They are now 30-0 for the season and one of just eight teams remaining in the state title competition. This is the farthest any Marshall team has ever gone in IHSA tournament play in the school's history. Lucas and Logan have already made plans to play for the ISU Sycamores next year. The Terre Haute Tribune-Star has details of the game here.

Obama Sees No Special Relationship With The Brits

It's not the treatment you would expect of an American president towards a British prime minister who broke with tradition and openly supported Barack Obama's candidacy for the presidency in last year's election. Upon taking office, Obama chose to return a special gift from former Prime Minister Tony Blair to President George W. Bush on behalf of the British people following 9/11--a bust of the great WWII leader Winston Churchill. The Obama administration then dispensed with the more formal joint ceremony typically conducted when two heads of state get together for formal talks this past week. Instead, the foreign press from Britain was treated to what is called a "pool spray" when a few select reporters are allowed to shout questions at the two men as they sat down for talks with photographers.

To show his respect and kindness towards the new president, Prime Minister Gordon Brown presented President Obama with an ornamental pen holder made from the timbers of the Victorian anti-slave ship HMS Gannet. Oak from the Gannet's sister ship, HMS Resolute, was carved to make a desk that has sat in the Oval Office in the White House since 1880. Brown also gave Obama a framed commission for HMS Resolute and a first edition of the seven-volume biography of Churchill by Sir Martin Gilbert. Brown and his wife also gave gifts to the Obama children giving Sasha and Malia an outfit each from Topshop and six children's books by British authors which are shortly to be published in America. What did the Obamas give in exchange? "A box set of 25 classic American films - a gift about as exciting as a pair of socks," exclaimed the Daily Mail. Mr Brown is not thought to be a film buff, and his reaction to the box set is unknown," the Daily Mail reported. "But it didn't really compare to the thoughtful presents he had brought along with him."

Check out this reaction in The Telegraph to see what the British media thinks of Obama's snub:

President Obama has been rudeness personified towards Britain this week. His handling of the visit of the Prime Minister, Gordon Brown, to Washington was appalling. First Brown wasn't granted a press conference with flags, then one was hastily arranged in the Oval office after the Brits had to beg. Obama looked like he would rather have been anywhere else than welcoming the British leader to his office and topped it all with his choice of present (*) for the PM. A box of 25 DVDS including ET, the Wizard of Oz and Star Wars? Oh, give me strength. We do have television and DVD stores on this side of the Atlantic. Even Gordon Brown will have seen those films too often already.

This was coupled with Michelle Obama's casual choice of gifts for the Brown sons - matching models of the helicopter which ferry her husband around. While Sarah Brown had spent time choosing gifts for the Obama girls, Michelle had clearly sent an aide to the White House gift shop at the last moment.

All in all, he doesn't think much of us, as I explained in my post here earlier this week.

But what's this? Something, suddenly, seems to have made the Obama White House perk up and start to take an interest in the Brits. The Queen has invited the President to tea when he's here for the G20 in April. And he's in through the front door of Buckingham Palace faster than a Harley Davidson roaring along Route 66.

Note how the coolness of Team Obama disappears when a bit of regal glamour is introduced into the equation. He might not like the Brits, but he can recognise a global superstar when he encounters one. He wants to be associated with her. He's shameless.

(*) If Obama, or someone in his inner circle, had spent two minutes thinking about what present to get Brown then they could easily have come up with something appropriate. He likes books. He loves American history. Get him a signed first edition of a good Robert Dallek book such as the brilliant Flawed Giant on LBJ. Come to think of it, Obama should read it too, if he hasn't yet, as it reveals a great deal about how a Presidency can go so wrong.

Cry A River For The Simons

Pacers President Jim Morris says the Simon family has lost $200 million on the NBA franchise during the decades they've owned the team. WTHR's Mary Milz plays the violin:

The Indiana Pacers say they are losing millions of dollars each year, far more than previously reported.

"Almost every year [Mel and Herb Simon] have owned the team, they've lost money. The cumulative losses probably approach something in the neighborhood of $200 million," said Pacers Sports and Entertainment President Jim Morris.

Morris says the team needs help. They're talking with the city's Capital Improvement Board, which operates Conseco Fieldhouse about the options, particularly who pays for maintenance of the facility. Right now the Pacers cover the cost, estimated at $15 million a year, and Morris said they can no longer afford it.

"The Pacers are not asking for help for the team. That's our responsibility to operate the team, but the team does not have the financial capacity to operate the building," Morris said.

Morris said there were at least a dozen other issues it needed to address, including the revenue the city now gets from the Virginia Avenue garage. He attributed the Pacers' financial troubles to a number of factors, including the 2004 brawl in Detroit and several off-court incidents that followed hurt attendance. While Morris said it's up about 1,500 per game this season, it still lags.

"The average gate revenue for an NBA game this year is in the neighborhood of $900,000, our average is something below $500,000," Morris said.

Morris said NBA salaries have "gone up substantially." He also said NBA revenue sharing is limited and the Pacers TV revenue has been well below the NBA average.

Even though the Pacers get all the revenue from all the other events at Conseco Fieldhouse concerts, Morris said, most events are "tightly controlled by the promoters...the margins are very, very thin and not significant in the overall operation of the enterprise."

Don't put a lot of stock in what Morris is saying. This is the same former Indianapolis Water Company executive who had a water utility to sell to the taxpayers of Indianapolis. He walked off with a $6 million golden parachute contract when the city taxpayers paid NiSource at least double what the utility was worth, while long-time water company workers had their benefits slashed to the tune of almost $50 million. You got stuck with over $800 million in debt and soaring water rates. Those poor Simons are doing so badly that they are "hoarding cash" to take advantage of opportunities in the real estate market. And don't forget that $28 million Bel-Air mansion Bren Simon got when she got tired of her Malibu mansion. Or the millions of dollars in campaign contributions Simon family members have showered on a variety of politicians.

CIB Disinformation Campaign Working

Remember those two debt problems I mentioned in a post yesterday about the CIB's presentation to the Municipal Corporations Committee--the one involving interest rate swaps and auction bond notes? Here's how that problem is described in an online story on the Star's website:

Further straining the CIB budget are two one-time payments on bond debt in the wake of the global financial crisis. Treasurer Ann Lathrop said the CIB will likely have to use cash for a $17 million payment due in June because short-term borrowing is very difficult to get.

Lathrop reported some good news on another $26 million payment due in September. A new insurance company may get a high enough credit rating to make the payment unnecessary.

Blame the global financial crisis, right? Who made the decision to abandon traditional debt instruments and why? The use of these "weapons of financial mass destruction", as Warren Buffett describes them, didn't come about until more recent years as governmental entities piled up more debt upon already huge debts to undertake capital improvement projects they could not afford. The way the CIB's debt is structured is just one big Ponzi scheme. The easy way out is just to blame the global financial crisis so nobody bears responsibility for the decisions that got us into this mess.

The media is also continuing to perpetuate the urban myth that the CIB is undertaking massive budget cuts. The Star's Brendan O'Shaughnessy writes:

The committee suggested that the full board save $442,000 by cutting 13 percent from grants to the arts, cultural tourism, Indiana Black Expo and the Central Indiana Corporate Partnership. Another $960,000 cut was recommended in a maintenance fund used to make unexpected repairs.

The extra cuts of $1.5 million combined would come on top of $6.2 million the CIB has already trimmed this year. The CIB began downsizing after releasing a report in January showing a current operating deficit of about $25 million that could grow to more than $43 million in 2010.

Again, because it bears repeating, the CIB hiked its budget this year $20 million from where it stood at the end of 2007. Don't insult our intelligence by suggesting you're making budget cuts when all you're really doing is reducing the level of spending increases. And you could have predicted they would begin a round of cuts to the local arts to ramp up the pressure from various players to support more tax increases to bail out the CIB. "The committee also discussed other options for closing the CIB's operating deficit, including a 1 percent increase in the food and beverage tax, which would bring in $19 million per year," O'Shaughnessy writes. "Raising the tax, however, would also make the city's food and beverage tax the second-highest in the nation." "Raising the hotel tax would make the city first in the nation on that front."

Bayh's March Back To The Middle

Sen. Evan Bayh's announcement that he will oppose a $410 billion, pork-laden omnibus spending bill is a sure sign an election is around the corner. Bayh's political compass drifted further to the Left when he was running for president and, having failed at that, sought a spot on the national ticket. Now, after helping deliver the presidency to an avowed socialist, he's finding his own party a little too hot to touch. The AP reports:

"The omnibus debate is not merely a battle over last year's unfinished business, but the first indication of how we will shape our fiscal future," Bayh wrote in an op-ed in Wednesday's Wall Street Journal.

The spending bill contains over 8,000 earmarks--pet projects of members of Congress. It will provide federal budget agencies with an 8% increase over their previous budgets on average according to the AP report. This is on top of the trillion-dollar stimulus plan Democrats just passed and which Bayh supported. Your party already permanently reshaped our fiscal future with that massive spending bill, Sen. Bayh.