Indy Tax Dollars

It's not hard to know...

...when to stop kicking a sleeping dog.  Feeling those teeth in your shin is usually a pretty good indicator.   It may be more of a problem with a possum.  Is he asleep?  Is he assuming his usual defensive position?  Or is he really dead?

We raise the subject because, at the risk of kicking the "sleeping" downtown hounds/possums fruitlessly one more time, we’re going to ask a couple of questions - on two different subjects - which may sound something more than familiar.

The first is the proposed new development - residential, retail and parking - in the northwest quadrant of the mile square.  At the risk of over-simplifying, the deal appears to involve, in part, the exchange of open space parking lots for a huge new parking building.

As we understand it, in exchange for some of that open space, the city will throw about $13 million into the pot to build a parking garage for the current owner of the land, thereby making other lots available to the developer.

We are given no logical reason why the city should have any part at all in this transaction.  If the developer can proceed with the project by replacing open lots with a garage, that’s the way things are supposed to work.  Go to it, guys!!

But we suppose it helps to have handy money lying around for the city.  One of the things we are told is that the city's share of this boondoggle will come out of the TIF "slush fund for friends" in the mayor’s office.  (Well, no, the reporters didn’t call it a "slush fund."  But then, when have they?)

The second item just popped into mind while reading the president’s State of the Union speech.  "We need to spend more money!"

We’re still embarrassed at nitpicking such small amounts, but somebody’s gotta’ do it.  Of course we’re talking about the millions of Indy/federal tax dollars that we just blew on the Georgia Street boondoggle.

We’re a state capitol.  Is there any reason not to believe that every state capitol probably wasted - at least - an equal amount this past year?  $10 million federal dollars times 50 state capitols amounts to $500,000,000.

Granted, that’s only a lousy half billion dollars.  And didn’t we just hear on the news tonight that the U.S. Senate refused to pass a resolution denying another increase of $1.2 trillion in the national debt?  So again, we apologize for mentioning such trivial items.

We don’t remember seeing news items in past months which actually criticized the Georgia Street expenditure.  Maybe after The Football Game we could turn the zipline around and sell rides between Georgia Street and Union Station!  

Guess we just have to keep wondering whether the downtown hounds and possums are asleep or dead.  Maybe some extra heavy steel-toed shoes would help. Any suggestions?

"Taking one for the team"

That’s how the author of this morning’s story - headed "Game will drop CIB for a loss" - describes the current theory of the city's net loss of nearly $1 million by putting on "The Football Game."

It’s a neat turn of a phrase.  Brings to mind thoughts of morale or espirit de corps.  But we usually associate that kind of thinking with some voluntary action by a member of a group.  Kind of like a league leading slugger laying down a sacrifice bunt to win the game when he knows he can put it into the parking lot!

In the current situation, we’re not quite sure who "the team" is.  Based on other numbers in the same story, it might be presumed that it is the CIB.  According to all estimates, downtown businesses are going to make out like the only child of a millionaire on Christmas morning.

But the members of the CIB have no "skin in the game."  They don’t have to come up with the money personally, and they’ve certainly never bothered to ask the thoughts of those who do have to produce the dough.

What we’re getting around to here, is a point we’ve raised several times.  We’d like to see more specific use of the language when defining who certain bodies are.  If the CIB is "dropped for a loss," who pays the penalty?  Just who constitutes "the team?"

And let us once more point out how beautifully our idea of Revenue Increment Financing (RIF) would have worked here.  Using the very latest figure available (from this same news story), the guesstimates are for a revenue increase of $150 million to $300 million "...in direct spending by visitors."

Using the $300 million figure, it is safe to say that something less than the full amount would be a net gain.  So our guess will bump that amount back down to a $250 million Revenue Increment.  (Our guess is as good as theirs!)  Our proposal was to have taxed that amount at 25% for a municipal gain of $62,500,000, leaving $187,500,000 additional money in the hands of local business and their employees.

Seems like a reasonable outcome for citizens having had to cope with downtown gridlock for a month.  And who knows?  With the city gaining $60 million plus, we might have been able to buy a couple of busses for IndyGo, or expanded library hours - or some other such trivial project!

As the day gets closer...

...it becomes embarrassingly clearer that "The Football Game" is a tremendous scam perpetrated by the National Football League with the overt assistance of local media, politicians and so-called business leadership.

It started years ago when the local folks bought into the idea that commitment to municipal debt of more than a billion dollars was going to make the city rich beyond all dreams.  If we had the "right facility," the kings of greed, otherwise known as the NFL owners, promised that they would bestow the ultimate symbol of their generosity upon Indianapolis.

We would be allowed to host "The Football Game."

In the ensuing years, a very basic question never got asked or answered.  If hosting "The Football Game" (TFG) was such a financial plum, why did only two or three cities bother to bid on it?

The question which now becomes paramount is whether the local backers got scammed or are they part of the deal?

We find out that the heart of the city has become the playground - the tax-free playground - for the multi-millionaire team owners and their high-rolling friends. Nor will the city be reimbursed for any additional public safety costs in handling thousands of city visitors.

While street closures shutting down the heart of the city will help visitors navigate from party to party, ordinary downtown workers will probably need a GPS device to find the location of the nearest available restaurant to their offices.

Another surprise showed up yesterday when we were told that 700 tons of sand will be dumped onto Victory Field to provide a "beach" for a flag football game.  Will somebody be billed for the use of the property?  Who gets that money?

There is little to show just who made all the deals or the source of authority to do so.  Can’t wait to see the financial reports.  We’d expect to see one of two results.  1) The city owes the NFL money, or, 2) It’s none of your damned business.  You’re supposed to be satisfied with the fact that Indianapolis was actually mentioned on a local TV station in Uzbekistan!

What becomes ever more embarrassing - and expensive - is the municipal inferiority complex which says to all comers, "We’re dying to be someone!  Tell us you like us, and we’ll hand you a blank check!"

P.S.  Recent stories claim Chicago is going to follow our lead on sports emphasis.  Does that mean we can look for a sliding roof on Soldiers Field?

 

Ignored again!

Just leafed through the current issue of the IBJ carrying loads of information about the up-coming downtown extravaganza.  It occurred to us to issue a reminder of a suggestion we made many months ago.

A quick reprise, for the benefit of those who may have a memory as short as our own.  Most local folks have some idea of the operation of, or at least have heard of, Tax Increment Financing (TIF) districts having to do with property taxes.  Our proposal was for the imposition of a Revenue Increment Financing (RIF) district in order to take advantage of the fantastic revenues to be generated by all major sporting events, but specifically The Football Game coming up.

In order to make it current and simple, we would have thought that such a district would fit in the same geographic limits of proposed traffic changes and street closings, and that it would apply to the same parameters time wise - January 19 through February 5.

Technology being what it is, the average revenue within that time period for every retail, service and hospitality business within said boundaries would be fairly easily obtained.  The RIF tax would have been applied to the increase - the increment - in revenues of said businesses for the stated time period, and dedicated to covering any and all municipal expenditures related to The Football Game.  (We would have suggested that any excess amount be spent on IndyGo, but since that operation is so well funded it is going to allow free rides all over the city for 3 days, we'll give it to the parks and libraries.)

We would have proposed an RIF tax rate of about 25 percent.  If this seems extravagant, remember all the projections that this event is going to have downtown Indianapolis rolling in dough.  And we might fall back on arguments used some time ago that increases in hospitality and car rental taxes really have minimal impact on local citizens.

Several events are set for the $12 million renovation area on Georgia Street.  The peasants will be allowed to walk into that area free!  Virtually all other events, most of which are in publicly owned properties, carry a price tag - with no indication of the ultimate recipient of those monies.  Care to guess how much will go to the NFL?

We’re going to have high rollers here.  Meals, drinks and hotel rooms will not be going for the day-to-day rates that our downtown revelers usually pay.  Why didn’t we - just this once - make sure the taxpaying public isn’t footing a large part of the bill for the presentation of The Football Game?  Shouldn't we at least have done something to make up for the tax revenues us mere mortals pay every day but that the National Football League multi-millionaires have been forgiven in advance!

The location was set for The Football Game about 4 years ago.  Legislation permitting the RIF approach, or some variation thereof, surely could have been approved in that time.  Is there not one single voice among business and political leadership of this city to speak for fiscal responsibility?  Is throwing money at it the only answer to our municipal inferiority complex?

 

A hint of a problem?

As we struggled through the increasingly massive hype for the upcoming football game (you know the one we mean!), some wording in this morning’s editorial on page B8 caught our attention.  With reference to the push for "mass transit," we get this statement.

"The legislature, which opens its session this week, won’t be asked to approve the overall transit plan nor the means to pay for it.  That would be left up to the voters in both counties.  All state lawmakers have to do is allow people in Indianapolis, Beech Grove, Carmel, Fishers, Noblesville and Westfield to decide for themselves whether they want to build a transit system of reasonable scale and relatively moderate price." (Our emphasis.)

In other words, the proponents of this gigantic boondoggle want to put a referendum before the public which will be backed by the very same kind of exaggerated statements of benefits we’re currently getting about the football game.

In order to save their time and effort, we’ll suggest what their wording for the referendum question to be submitted to the voters might look like.

"Do you support a reasonably minor tax increase in order to build a transit system which will attract billions of dollars of economic development; bring in thousands of tourists with millions of dollars of revenue (like Union Station); turn Meridian Street into a limited access, high speed path between the Palladium and the Stadium; and might even help some citizens without private transportation to get back and forth to work?"

Most of the folks who support this program are the same ones who decided that it was OK to commit well over a billion tax dollars to build a couple of sports palaces downtown.  And they didn’t even bother to get citizen approval for those.  Just imagine what they might do when they can say, "Hey. You told us it was what you wanted!"

If this does get shoved through the legislature, we urge all voters to watch language usage very, very carefully.  For instance, in the wording of the editorial as well as the referendum question we suggested above, how many definitions are there for the word "reasonable?"  And what actually constitutes a "relatively moderate" cost?

We’re reminded of the hoary old joke which used to make its way around the legislative halls.  The proponent of an amendment says, "But Senator, it’s only a one word change.  It just inserts the word ‘not’ after the word ‘shall’!"

Who will write the referendum question?