Friday, November 20, 2009

The Suburban Counties Better Wake Up Soon

One of the most outrageous assertions I've heard coming from Indianapolis officials on a task force looking at the Capital Improvement Board's financial woes is that the problem lies in the suburban counties surrounding Marion County not paying their fair share for the sports stadiums and convention center. What are these people smoking? State and regional taxpayers have poured tens of millions of dollars annually into this county to support these facilities. The state created a special taxing district several years ago that diverts general revenue funds into a fund to pay off the bonds on Lucas Oil Stadium and the Indiana Convention Center expansion, which it expanded in size just this year. Residents of Boone, Hamilton, Hancock, Hendricks and Shelby Counties are paying a food and beverage tax to pay for Lucas Oil Stadium and the convention center expansion. Following these self-interested Indianapolis officials' assertion through to its logical conclusion, I guess the rest of the state's residents should be demanding a share of the revenues generated to Indianapolis' economy because the center of state government is based here with all of those jobs and spending related thereto.

The notion that suburban taxpayers aren't paying their fair share is absurd. If you want to feed the corrupt inner city monster, then move to Chicago. Suburban taxpayers in Illinois have fed the Chicago and Cook County government monsters billions over the years and the demand for even more never ceases. Wake up, suburban counties, unless you want to be tapped even more to feed this monster called the Capital Improvement Board. And if you think it will stop there, think again. They've got more plans in the works to tax you for the benefit of crossing the county line into Marion County. The CIB is not your problem. Don't let them convince you that it is. "Regionalism" is just a euphemism for getting other people to pay for our out-of-control spending in Marion County.


Sean Shepard said...

Three townships in Cook County (Illinois) voted to secede from the county mostly over high taxes to feed "the monster" as AI so correctly puts it.

The votes are nonbinding, but there you have it. The will of the people telling politicians that enough is enough.

Nick said...

A regional approach is not unreasonable in this case.

We talk about township consolidation, yet, why does every county in central Indiana have its own convention and visitors bureau?

Most people don't even know they exist. Yet, tens of millions of dollars are wasted each year on uncoordinated marketing efforts by individual counties on top of the Indiana Department of Tourism's unfocused efforts to please everyone.

Lets be honest, some counties don't have much to offer by themselves except an annual corn maze or some obscure museum collection of old Ball jars that few care about.

We need every marketing dollar in this region to count in order to compete against other states for convention and tourism business.

Gary R. Welsh said...

Nick, You miss my point. The other counties are already paying for our convention and sports stadiums. The benefits do not flow out to them. A few downtown hotels and restaurants, along with the construction cartel that benefits from all of the public works spending, derive the benefits from this spending. It doesn't matter how much taxpayers contribute to this cause; it's never enough. These jobs suck big time. Most of them pay poorly. They don't offer health insurance and other benefits. Many of the hospitality workers wind up at Wishard with their emergency health care needs and the taxpayers wind up paying their health care costs. Let's focus on good paying jobs that lift the entire economy up.

Gary R. Welsh said...

Notice that the city officials complaining about suburbanites not paying their fair share are the same officials who get free tickets, food and drink to all the games and events at these facilities.

Nick said...

It appears that the politicians have chosen to seek more taxpayer funding instead of seriously attacking the expense problem.

Lets be serious. We all know that it is not utility costs that are pushing the CIB to insolvency. It is a agreement to take on ALL the operating expenses of a new stadium, while giving the Colts ALL of the offsetting revenues.

We have already increased the hotel tax and regional sales taxes to pay for this stupidity.

When will Jim Irsay step up and show something other than contempt to our community?

Where is his corporate citizenship, philanthropy, and concern for a distressed hospitality industry?

I argue the Colts should have the same deal as the Pacers. They get the revenue, but they also get the expenses.

How can anyone allow Jim Irsay get away with the "deal is a deal argument", when we all know he has broken at least two other contracts with the city because he wasn't happy with the size of his profits?

Its our turn.

CIB Bankruptcy is around the corner.

Gary R. Welsh said...

That's the Chicago Way, art. Why am I not surprised you like that idea.

Sean Shepard said...

Following up on Nick's comment. Why "compete" (as a government run enterprise) for the convention business?

Why not let private firms invest their own dollars to build stadiums and convention space out (just like they do with office buildings, or warehouse space? [We don't build taxpayer owned warehouse space and make bad deals with logistics firms just so they will put their business here do we?])

Why not keep tax rates low as a magnet for attracting all manner of businesses to start or relocate to here? Make it the most cost effective place to do business and get a much broader spectrum of industry instead of one dependent on tourism or convention travellers (most of whom would likely prefer someplace warm in the winter or with oceans, mountains, theme parks or casinos the rest of the year].

Nick said...


I would prefer the CIB, ICVA, and Indiana Stadium and Convention Building Authority work on the expense side of this problem since they have management oversight responsibilities and control all key agreements.

Endlessly creating new revenue streams to feed an poorly managed and clearly disfunctional monster is not the answer.

While I appreciate your keen insight, I do disagree with you that the benefits of Indianapolis do not flow out to the donut counties and vice versa.

Downtown Indy said...

Imagine what horrible financial shape we'd be in if we didn't have all that revenue pouring in to the county. OK, I'm being sarcastic.

The sad fact is, these operations are all structured so that the main participants are assured they cannot lose, and the lowly taxpayer is assured they will be tapped for more cash every time the balance sheets go negative (yeah, I know - when did they ever go positive?).

If they decide to reach into the other county wallets, they will do so. Short of an armed revolution, I doubt there's any chance of stopping them.

Jon said...

Welcome to doublespeak 101, when they say someone isn't paying their fair share what they really mean is we need more money to blow on our favorite billionaires!

Paul K. Ogden said...

You're right that the suburban counties are already paying for the facilities via their own food and beverage taxes.

Another thing that's been overlooked though is that the Pacers and Colts actually take away revenue from suburban counties. Example: Someone travels from Noblesville to Indianapolis for a Pacers game and spends $200. That is $200 bucks of disposable income that is not spent in Noblesville, taking the family out to a restaurant or to the movies. You're transfering the expenditure of that disposable income from Hamilton County to Marion County.

Unknown said...

Aren't used to paying for something? I guess we can just repeal that food and beverage tax then. Apparently the money isn't making it downtown.

The city is never interested in donut county input before it digs itself a financial hole. I don't remember anyone asking the regions opinion on a new stadium or $1 billion in new taxpayer obligations. The only time the city converses with the region is when it comes ready to lecture about paying our fair share. More of the same here.

Citizen Kane said...

Of course, they want to expand the number of ways and the number of people they steal money from - and they continually get away from it.

Soon the same people will be trying to shove the rapid transit boondoggle down our throats, despite us being approximately a third as dense as Detroit. No matter, some people want a new toy to play with and another excuse to steal other people's money.

Corruption in Indianapolis said...

I personally believe that Indianapolis is ran by people that have no idea what is the correct thing to do. Public Safety is Number 1 but the colts gotta have theirs two. In the mean time everyone will loose.This city knew when they built Lucas Oil Stadium they could not afford it, They spent thier money on that and they have been covering other corrupption to pay for it. The city of Indianapolis cannot even keep people safe when they go to a game. The cheif and his staff are corrupt and he only cares about him self. This city will burn if people in charge do not start thinking about public safety and the protecting the citizens from the corruption

Anonymous said...

I will fight this. This could likely be the first time I go down to the statehouse and/or my local county office to protest. The welfare layabouts and bums in Indy have sucked the city dry for their government provided babysitters (IMPD and MCSD) and health care (Wishard, etc.). The city felt that it needed to jack up certain taxes to bailout billionaires, instead of adding more money to the funding of IMPD and MCSD. Indy can sink or swim on their own. They choose to bailout billionaires, to continue to make huge parts of the city tax abatement areas, etc. etc..

We really need to create a good grass roots organization to fight this, along with good elected officials from the region. Given the Ir$ay tax had some opposition, and one county even gave Indy the finger (even after Mitch's bribe), I think any future taxation would be a very, very hard sell.

Anonymous said...

If this passes, I am _done_ with _any_ charitable giving. I will throw gently used old clothing out into the trash instead of spending the $1.00 it costs me to drop the off at a shelter. I will be reducing my food and beverage taxes even further, or may just stop supporting locally owned restaurants that I eat at entirely by not spending a dime so that greedy Indy politicians can continue to give their ilk quasi-government jobs that pay ridiculous wages.

Nick said...

Don't you think the lack of hospitality and recreation spending in central Indiana would be more of a concern than the free competition within the central Indiana region?

I had some friends visit from South America recently. They thought it was funny when we made the distinction between Indianapolis,Carmel, Fishers, Zionsville, and Lawrence.

It was all the same to them if it was within a 30-45 minute drive.

Downtown Indy said...

So THIS is what happened to the Indy Chicken.

Durango City Council

Gary R. Welsh said...

The Chicago Sun-Times reports on the ominous signs on the horizon for the convention business. Chicago is in a tailspin despite huge expenditures to support the industry:

McCormick Place has seen nearly a third of its business vanish this decade, a period that saw two recessions. Attendance at major events in Chicago's main convention center declined from 3 million in 2001 to 2.3 million last year. Las Vegas and Orlando held up somewhat better but likewise have seen attendance fall off since the middle of the decade.

More recently, Tradeshow Week, an influential publication in the industry, reported quarterly figures showing that since last year, convention attendance and space usage are down by 8 percent to 17 percent. An analysis it published last spring carried the hopeful headline, "Better days ahead."

Sanders has analyzed the publication's data from its annual ranking of the 200 largest trade shows. He found that total attendance at such events has remained flat at about 4.5 million since 1998.

Despite a market that is no better than stagnant, cities across the country have engaged in a taxpayer-supported arms race of convention hall construction. Convention space across the nation has more than doubled since 1986, Sanders said.

Over that same period, McCormick Place spent more than $1.5 billion to grow by 40 percent and keep its title as the nation's largest convention complex.

But the trends from some of its biggest customers have been troubling. The plastics industry show, a triennial event moving to Orlando in 2012, drew an estimated 44,000 people this year, down from 90,000 in 2000, Sanders said. The National Restaurant Association show, a Chicago event for more than 50 years, drew about 54,000 people this year, half the attendance in 1997.

David Causton, general manager of McCormick Place, said the facility's expansion was needed to keep pace and to attract new meetings.

"The large trade shows have matured," he said, but other types of conventions are growing, and McCormick Place is suited to attract more small meetings.

Causton said regular meetings of the machine tool and packaging industries post consistent results, while attendance numbers are up for groups in the medical and scientific fields.

As for the overall attendance drops, Causton said it's due to the recession and extremely hard times in particular industries. He said there's a common pattern of exhibitors spending more once they see that a show's attendance is picking up.

"We've been through this before, and we've always rebounded," he said.

The plastics show said its move to Orlando will save it $20 million. McCormick Place responded to the defection by saying it would open talks with its unions for concessions. Some say Chicago's union costs are out of line, but past studies have shown the city's labor costs comparable to other big cities -- and in some cases lower.

Union officials say they don't want to authorize savings that enrich exhibition contractors but don't get passed on to customers.

Linda Thompson said...

Meanwhile in San Diego, the local convention and visitor's corporation is trying to convince voters that the world will end if $700 million isn't spent on expanding the convention center there. Where have we heard that before?