Thursday, June 04, 2009

Daniels Wants CIB Dismantled

Let's see the details before jumping to any conclusions, but it appears Gov. Mitch Daniels plans to put forward a bailout plan for the CIB that looks an awful lot like a state take-over of the mismanaged governmental entity. "You guys had your chance to fix this and failed. Here's how it's done." That's how the Star's John Ketzenberger described how the plan looks to Mayor Greg Ballard and CIB President Bob Grand. Ketzenberger previews Daniels' plan in his business column today:

The CIB will be dismantled, and a new panel will take control of Lucas Oil Stadium, Conseco Fieldhouse, Victory Field and the Indiana Convention Center. The governor and the General Assembly would have appointments to the new board. So would local officials.

To raise additional money, the state will expand the Professional Sports Development Area to include the J.W. Marriott hotel and raise the cap on state sales taxes diverted to local use to about $24 million, or $8 million more than the current cap. It's believed that will go a long way toward balancing the budget if the new board's sole charge is to run the stadiums and convention center.

Many details remain unclear, including the most important: Where will the many public entities that receive millions annually from the CIB get those dollars in the future? This includes the Indianapolis Convention and Visitors Association, which is contracted to sell space in the convention center.

Grand, who said he hasn't been directly involved in the talks, said that "whatever folks decide to do, we're going to be supportive."

This could not have been the outcome either Ballard or Grand wanted, but their handling a problem not of their own making to date has been less than reassuring. The governor's plan as outlined by Ketzenberger still calls for an infusion of more tax dollars into the concern--$8 million. The state has already been kicking in $16 million a year to support Lucas Oil Stadium and the expanded convention center. Let's wait to see more details before passing judgment on the governor's plan.

UPDATE: City-County Councilor Ryan Vaughn said during a radio interview this morning on WXNT that the governor's plan would still include a number of tax increases such as car rentals and hotels. Ryan described these as taxes paid for by visitors and not Marion County residents. I beg to differ. Statistics from the auto rental business indicate that the vast majority of car rental transactions in Marion County involve local residents and businesses. A higher hotel tax will work to the advantage of hotels in neighboring counties that are already beginning to use their lower rates to their competitive advantage.

UPDATE II: I don't like the idea of rearranging the deck chairs on the Titanic. The plan put forward today by Gov. Daniels and Mayor Ballard looks a little too much like that to me. Yeah, they're dissolving the CIB, but in its place, they're creating an even more powerful locally-controlled entity under the Marion County Building Authority to oversee not only the CIB facilities, but also the City-County Building, jail, processing center, public safety training academy, DMD properties and city garages. This Authority will have 9 members: 2 appointed by the mayor; 2 appointed by the governor; two by the county commissioners; one by the city council; and one by the president of the ICVA. That latter appointment is an outrage. Don Welsh moves here from Seattle to run the ICVA and gets a vote on all of these important facilities. It is an insult to the taxpaying citizenry of our community to designate this special interest group that spends tens of millions of our taxpayer dollars with a vote on the new authority. We know what the ICVA wants to do. They always want more and more money to spend on promoting downtown's convention industry whether it's in the public's interest or not. The problem here is that we can anticipate the same downtown elitist capturing all of the appointments to the Authority, given who is making the appointments. Citizen advocates will still be on the outside looking in at this even more powerful entity. The CIB goes away without even an investigation or audit to determine what happened with our money.

I'm pleased to see they're not trying to infuse this new authority with the $47 million a year the CIB had been demanding; however, they're still trying to stick taxpayers with a $20 million additional investment in the new authority. That comes from: $8 million in state tax revenue diversions; $4 million from raising Marion County's hotel tax to 10%; $6 million from increasing the admissions tax from 6% to 10%; and increasing the car rental tax from 4% to 6%. That $8 million state investment will mean cuts in other areas of state government, which are already being slashed deeply under the governor's 2-year budget plan. The higher hotel taxes will disadvantage Marion County hotels in competition with suburban hotels, which will have a decidedly lower tax rate. Indianapolis will have one of the highest hotel taxes in the country with this increase at 17% when sales tax is added into the equation. The plan claims a $4 million savings from the city providing a "credit backup" to cover the CIB's debt. Another $13 million in savings is claimed from "operational efficiencies." I see no commitment that this new authority won't be giving away $15 million in additional subsidies to the Pacers as the current CIB had proposed. Smoke and mirrors. That's what it is. Sorry guys, we're not that gullible.


M Theory said...

Should he raise sales tax, you do all realize this would be the THIRD SALES TAX INCREASE IN FOUR YEARS!

I won't be dining out or shopping downtown much, if all, any more.

Paul K. Ogden said...

Why does Ryan Vaughn and others keep repeating that lie about rental cars being used mostly by visitors to the city? The studies all say otherwise, yet they continue to make the claim.

Wait, these people also keep repeating the lie that professionals sports are a good investment for a city.

Seth M. Ward said...

Paul, speaking with regards to myself, I do not own a vehicle. When I travel outside of Indy, I utilize the rental car agencies. I am not sure if I would avoid the majority of taxes if I would rent from an off airport location, but 9 time out of 10 I get better deals online which has me picking up and return the vehicle to the Airport. Whether Mr. Vaughn's statement are correct, I ALWAYS pay more than I think I should in taxes and concession fees than I think is appropriate for a Marion County Resident.

Downtown Indy said...

Everyone who has a car in the body shop, and that's a LOT of people, is paying taxes on a rental car.

Or more accurately, we ALL are paying them through the rates our insurance companies charge.

Likewise anyone renting a truck to move or a car to drive on a vacation.

Patriot Paul said...

It's important to turn the page on the CIB debacle, but if in name only, the fear remains of no assurance that political appointees with the same mentality and ineptness would create another living nightmare with no oversight mechanism and still shrouded in the same secrecy perpetuated by the CIB. Appointee from the City-County Council; the same body who just codified it's own corruption to the tune of $1,000.00 limit per person, per vote on perceived conflicts of interest; the same body whose membership is bathed in unresolved ethics problems and hardly claims to police itself with any real enforcement? Unless there are major reforms, which is doubtful, we only turn a despicable chapter from the same book. Are we to assume the Arts Groups and Indy Black Expo, among others, will go to this new well. Old wine in new bottles? We are watching and not going away.