Friday, March 27, 2009

A Democrat's View Of The CIB Bailout

I knew there was at least one Democrat who would agree with me on at least some aspects of the planned bailout of the CIB for the benefit of our billionaire sports team owners. From the IPOPA blog:

"So our unelected Capital Improvement Board is in an operating hole that will get worse next year if the Pacers refuse to pay $15 million in operating expenses for Conseco. The Pacers tell us they lose money year after year. But then they pull a PR AIG.

Ruth Holladay reported last week that the Pacers took 60 people, including supportive corporate elite, on a five-day excursion to Cancun, Mexico. While one might argue the Pacers are prudent to ensure their advertising base is safe in a tough market, it bothers me that representatives from WISH-TV and the Indianapolis Star attended.

Holladay reports that the group was wined and dined at le Blanc Hotel and Spa, an all-inclusive oceanside resort with hot tubs in every room. The trip included side excursions for every one in attendance, and the Pacers gave the women expensive jewelry and the men fancy sport watches.

The question I would ask (were I a full-time reporter) is whether the Pacers have done THIS every year, or is there something special about THIS year and this TIME that makes it necessary? Oh, sure, there's a bad economy, but there was one last year, too. MIGHT the Pacers be trying to ensure a favorable corporate climate precisely when they seek to hoist the new costs onto the taxpayers?

Are we supposed to believe that there's NOT going to be any spillover from Star marketing to news/editorial? Really? Then why wasn't the story about this trip reported? Didn't every paper in the country report when the automotive executives who got bailed out fly to Congress in corporate jets? Remember when AIG execs paid for a $440,000 weekend retreat? EVERYBODY covered it. But the Star says nothing? (Look, we know the Simons are billionaires. But the rule of thumb is that if you're asking us to open the taxpayer wallet to bail you out, at least have the decency to ACT broke. Tighten your own belt first before asking us to go digging).

Also, the Indianapolis Star today runs a story about the CIB/Pacers fix under the heading of "Shared Pain." Guess where? BELOW "the internet fold." In other words, you WON'T see it unless you expand for today's top stories. What ran above it?

Homeless man held in blaze at complexOfficials say suspect set fire to intimidate his ex-girlfriend into coming back to him.
Indy says 'no' to Louisville's Downtown light showTourism promoters wanted to project messages onto buildings during NCAA regionals.
City, stadium get dress rehearsal for Final FourHead-on crash kills Franklin man - 8:50 AM
United Way issues $1.4M in grants - 8:35 AM
Ban on smoking in car with kids advances - 8:26 AM
Finish Line 4Q losses narrow, beat estimates - 7:38 AM
12-year-old dies in industrial accident - 7:27 AM
Dozens seek Noblesville police chief job - 7:25 AM
Golf cart crash kills boy, 9, in Owen Co. - 7:25 AM
Read all of today's breaking news

I'm glad that the United Way still has money to give and that Finish Line did well (Hurray! They can keep their Pacer sponsorship!), but how do either of these stories have the impact that this one does on public policy? The meetings about the CIB are already being held "behind closed doors," and we can't even get the Star to front the options that are on the table so we can respond?

(As an aside Advance Indiana offers an interesting view of Jim Shella's coverage of a protest rally during which AI talked about the CIB bailout. Was any of the CIB portion covered by WISH-TV? Nope).

Anyway, here's what the Star says is on the table, along with my thoughts in response:

THE IDEA: Increase Marion County's 2 percent food and beverage tax to 3 percent. This would raise $18 million a year.

THE PROBLEMS: Every time you go out to eat, you get socked. If I owned a restaurant outside of downtown, I'd be hopping mad because my customers get popped, and I get close to NO benefit from the Pacer attendance. (MAYBE I get the guy who stops through after the game on his way back to Noblesville). You know who else would be hopping mad about this option? Me. I like to go out, but I will start eating at home more often, and every dollar they thought they would raise in new revenue goes off the table.

THE IDEA: Increase Marion County's motel/hotel tax from 9 to 10 percent to raise $4 million per year.

THE PROBLEMS: Let me understand this. We need the Pacers as the "bookend" for our convention business, but we're going to make it too costly for anybody to want to actually stay in Indianapolis? If somebody doesn't think a 1% increase matters, you're sadly mistaken when you're thinking about booking convention business. You're talking an additional $1,000 PER NIGHT for a small conference of 500 people with $200 per room PER PERCENT that the hotel tax is higher than competing cities. If I'm contemplating taking a conference that will book 2,000 rooms for three days to either Louisville, which has a 15% rate, or Indianapolis, with its 9%. Assuming only $100 per room, I can save $36,000. Why in the world would we give away that kind of competitive advantage if we're trying to make tourism our thing? Also, why apply the tax to EVERYBODY in Marion County? If I owned a hotel or motel near the county borders, I'd be hopping mad because people will just stay in the doughnut counties. In other words, my customers take a hit when I get NO advantage from downtown events.

THE IDEA: Raising the 6 percent admissions tax to 7 percent to bring in $1.5 million a year.

THE PROBLEMS: There aren't any with this idea. Having the "users" of the service pay for the service is the only equitable way this gets done. One percent increase?
I'd make it five before I'd pursue any other options. The Pacers will say, "Yeah, but if we raise the cost, we'll lose some fans." And I'll say, "Then reduce your payroll! You were the ones who let the Pacers image get tarnished by not getting rid of the trouble spots earlier." I'm tired of rewarding bad management with bailouts. Aren't you? Also, as I understand this tax, it's for ALL Conseco events, not just the Pacers. People who go to concerts or rodeos at Conseco pay more. Republicans may say, "Yes, Chris, but what about public libraries? You want us to make books available for free. Why not charge an admission fee for the central library?" Because, respectfully, some things should be public goods, such as educational information. So, no, I don't mind the "wealth transfer" that occurs when rich people have to pay so poor kids can get a place that encourages reading. Call me crazy! Are the Pacers a public good? Is a L'il Wayne concert a public good? There might be some camaraderie value, but certainly nothing that is close to a library. Sorry.

THE IDEA: The Indianapolis Colts are asked to give back a share of the revenue they now get from concessions, and we get $3.5 million.

THE PROBLEMS: None, in theory. The Colts should have never been offered concessions for events that had nothing to do with their product in the first place. But good luck getting that back from Jim Irsay! He's Christian and charitable, but he's not crazy.

THE IDEA: Expanding taxing districts: Adding new hotels and other stadium-related businesses to a sales tax increment financing district in Downtown would generate $10 million a year. Odds: Possible.

THE PROBLEMS: None. Next to having the fans absorb the entire operating cost of
events they choose to attend, at least if you do this, you are putting the cost on those business ONLY that actually benefit from downtown events.

THE IDEA: Alcohol tax: Indiana's spirits, wine and beer taxes are on the low end, but lawmakers are more interested in solutions that affect Marion County alone, not the whole state. The taxes raise about $42 million a year, which is split between the state and local governments. Odds: Unlikely.

THE PROBLEMS: It's an easy fix to tax "sin," but thankfully this isn't really on the table. It's grossly unfair for every bar owner and grocery store in the state that does
not benefit from downtown Indianapolis events.

In sum, legislators who try to make the pain TOO shared might be feeling their own come election time."


M Theory said...

I don't read the IPOPA blog often enough!

MarionCountyTaxpayer92 said...

There is a current bill in the Senate that would allow taxpayers in Marion County to have the same voice that every other taxpayer in Indiana has. Marion County is the only county that allows appointed bodies to make tax abatement issues, instead of elected officials. Taxpayers have no voice in Marion County, how does one hold an appointed body accountable??

Senator Lawson, chair of Local Government is refusing to hear the bill because the mayor is against it.

Call Senator Lawson & the Marion County Senators and tell them taxpayers have had enough of free tax abatements given to whoever befriends the mayor.

Senator Lawson 232-9414

Senator Delph 232-9488

Senator Lubbers 232-9466

Senator Merritt 232-9533

Senator Miller 232-9489

Senator Young 232-9517

Senator Waltz 232-9814

Senator Taylor 232-9847

Senator Breaux 232-9461