Indy Tax Dollars

Calling Lewis Carroll !

Mr. Carroll, the rabbit hole apparently has reappeared and it seems the mayor's office has fallen into Wonderland.  Tell Alice to be watchful for further strange happenings!

The Capital Improvement Board (CIB) has disbursed 3.1 million tax dollars annually to a variety of private civic organizations - the arts, Black Expo, etc..  How this fits into their primary mission we don't know, but we do think the elimination of these items would have been, in current conditions, an early and easy decision.

(We continue to believe, if these are indeed appropriate uses of public funds, that each such item ought to show up in the city budget, to be approved in the light of day by elected officials.)

Now that the Colts have told the city to get lost with reference to any contribution by them toward the solution of the CIB financial dilemma, the mayor's chief of staff has come up with a truly imaginative suggestion for easing the situation.

He's quoted in this morning's paper (4/28/09) as saying, "If the Colts found it intriguing to help fund the arts or cultural tourism or Black Expo, that could be one way to move forward."  Our first question is whether he is intimating that failure of intrigue by the Colts will mean continuance of this CIB generosity?

We've heard a lot about what great citizens the Colts are in Indianapolis.  If so, wouldn't it be likely that they are already making substantial contributions to these and other organizations?

Frankly, it looks to us like the Colts are "intrigued" only by maintaining every dollar "negotiated" with the CIB.  And it seems the relationship between the two organizations is very similar to our "negotiations" with our children when they are asked, "What would you like for Christmas?"  Except, of course, we do have very real dollar limits on what we are able to give!

We fail to see how contributions to various civic charities by the football team is, in any way, a real "move forward" toward solution of a municipal agency's fiscal problems which have been years in the making.

Mr. Carroll, please tell us how to wake up the mayor's office as you did with Alice to bring her back from Wonderland!

No time for Pollyanna

A column in the local daily (4/25/09) was headlined, "We worked together before, let's do it again."  At one point the author says, with regard to the CIB operation, "If those agreements are being called into question, shouldn't the individuals who negotiated on our behalf be questioned...?"  (Our emphasis.) Ridiculous!

Upon what basis was anyone authorized to negotiate "on our behalf?"  Who is "our?"  The taxpaying public was never asked whether it wanted the deal at all, much less given any information as to what was being discussed.  In fact, those "negotiations" were carried out in complete secrecy while public statements were being issued from the mayor's office that "nobody knows nothin' about no new stadium."

Generally the column, as indicated by the heading, is a "let's all play nice and find some more money to take care of the CIB" approach.  No, Pollyanna.  Not this time!

The activities of the CIB are part and parcel of the free wheeling, giveaway public policies adopted for downtown Indianapolis decades ago.  Refusal to look back at these policies as possible sources of the current fiscal problems has left us where we are today.

It is way past time for the "let's not look back and point fingers" philosophy.  It is time to determine, for the current CIB situation, who made the decisions and upon what basis.  While citing serious negotiations over a period of years, Mr. Irsay simultaneously claims he never asked for the deal he got.  Was he begging for less?

We have no idea why the Pacers apparently are being offered a deal which is a net loss for the CIB of $10 million per year while trying frantically to take care of a multi-million dollar shortfall.

We don't believe even Pollyanna would suggest that tax increases providing more millions, to be spent by the same people through the same processes and without any question of past practices, is a reasonable answer to our problems.

Maybe it is time to put some people under oath and find out why, and by what authority, taxpayer dollars were, and are, being handed out so freely.  Misfeasance?  Malfeasance?  If malfeasance, is an agreement enforceable?

Only a few words -

- but a worrisome thought.

After years to look forward to, consider, plan and prepare, it was only as time neared for the new stadium doors to open that the Capital Improvement Board (CIB) announced the need for additional funds to operate and maintain a significantly larger and more complex building.  The painful surprise to the taxpayer was in the second paragraph of that report saying, "But we ain't got the dough!!"

The result is the current frenzy of activity in attempts to determine which taxpayers are going to be made responsible for the bailout.  But even in the midst of this furor, another outlandish scenario comes to mind.

The CIB is starting on an extensive renovation and enlargement of the convention center itself.  Is it just barely possible that the board has once again failed to consider that a larger, more complex building will also be more expensive to maintain and operate?

Are we going to be asked to repeat the "which tax and how much increase" charade in another year or two?

One might assume that convention planners will be charged a fee which will at least cover operational and maintenance costs.  This is the obvious, logical "user pays" business approach.  But since the CIB uses an opposite procedure in its other dealings, one might wonder just what the plans are for the future.

Trivia question:  True or False - The people at the CIB who are responsible for negotiating contracts for the sports palaces are known as the "Gift Wrap Department."

Look both directions

With all the (appropriate) furor about the bailout of the CIB with new and increased taxes, let's not forget about the rest of the city's downtown financial bumbling.

We still have property tax problems, a significant part of which stems from, and has been aggravated by, decades old fiscal policies.

If someone wants to tie the two situations together, just consider that the two sports palaces owned by the city and operated by the CIB represent well over a billion dollars worth of Center Township real estate and improvements which are not on the property assessment rolls at all.

The downtown mall, which was to be the backbone of economic development and revenue enhancement for the city, turns out to be pretty much of a white elephant itself.  By the time the bonding, leasing and tax laws are added into the mix, it is apparent that the production of new tax dollars - if any - is adding little to municipal financial stability.

The city has handed out tax abatements and established Tax Increment Financing districts which divert new revenues away from municipal usage.  It has given outright subsidies and "invested" in far too many downtown projects with no follow-up information for taxpayers as to the results of such activities.

While others are clamoring, rightly so, for an independent audit of the CIB, we renew our often repeated plea  for someone, somehow - another audit? - to tell us at least two things.

Just what is the total financial committment, bonds, leases, etc., of all city agencies, and, when can the taxpayer expect some kind of return on all these fantastically successful downtown economic development projects?

Please, Mr. Mayor...

...stop with the baloney.  You keep repeating the nonsense that the CIB is central to the future life of the city of Indianapolis.  You refer to 66,000 jobs and $3 billion plus revenues.  And surely you know that these figures, even if accurate, have relatively little direct relationship to professional sports.

If you were really promoting the economic well-being of the whole city - as opposed to a small part of downtown - the primary plan would have taken care of expansion, and adequate promotion of, the convention center to bring in significant amounts of "outside" money.  The left-overs, if any, would have gone to a new stadium.  Or more appropriately, to the renovation and remodeling of an adequate, already standing, but still unpaid for, building.

The new stadium was built pretty much to the demands of the Colts - a movable roof? -  as a football arena, despite false claims that it would be an integral part of convention operations.  An attempt was made, fortunately unsuccessfully, to oust a long-established, successful business in order to provide a few more parking spaces promised the Colts.

It's time to take a hard, honest look at what has been and is going on downtown.  Some suggestions have been made, Mr. Mayor, with which we would certainly concur.

1)  Replace every member of the CIB serving prior to your election.

2)  Make absolutely sure that there is not even a hint of "conflict of interest" for any appointees.

3)  Bring in an independent audit team to determine the exact status of CIB finances, and the reasons therefor, prior to the adoption of any new or increase of taxes for "bailout" purposes.

We then offer, again, our own suggestion for a permanent solution to the problem.  Give, or sell for one dollar ($1) each, the stadium to the Colts and the fieldhouse to the Pacers.  (We hate to be repetitive, but after all, we see over and over proposals for higher taxes with little variation.)  The deal would include, for the new owners, all responsibility for maintenance, operation and property tax costs.

We already have in place taxes to cover the cost of construction debt.  With the reduced operational responsibility, the CIB budget itself could probably be cut in half.  Elimination of the current maintenance and operations costs at the stadium and the fieldhouse, plus significant increase in property tax revenues, might very well allow for a reduction in taxes rather the increases you are calling for.

Is it worth a thought, Mr. Mayor?

Abuse of language...

...and other random thoughts.

We do wonder about the reference by the chairman of the Senate Appropriations Committee to a "balanced" state budget as voted out of that committee.

The chairman says, "If we did not have the federal stimulus dollars, we would be facing significant cuts in every single area of state government."  What he means is that, with the use of the federal funds, we will postpone facing those cuts for two years "when the stimulus money evaporates."

We appear to be "kicking the can" down the street for two years with no obvious solution to the problem we know is in the offing.  Or does he intend to play Oliver Twist and take a tin cup to Washington with the plea, "Please, sir, may I have some more?"

We also wonder about the application of the word "stimulus."  A few days ago we had to accept passage of a monstrous, 1,000-page piece of federal legislation which "had to be passed yesterday to prevent the collapse of the world tomorrow" in order to stimulate the economy.  Now.  Now.  Now.

The buzz-words most frequently applied to timely projects were "shovel ready."  We're not sure how those words apply to operational costs in the field of education.  Nor do we understand the "timeliness" of those expenditures running two years into the future.

And, while the local fiscal situation is still under consideration, we will suggest, again, that problems other than the CIB be looked at in some detail.

Reference is to direct subsidies, property tax abatements and TIF districts which have effectively nullified or limited tax revenue increases.  Most of these situations are initiated by the Department of Metropolitan Development, with the blessing of the Mayor and the City-County Council.

An article in the local daily paper, dated June 30, 2008, pointed out that $3.36 billion worth of projects have been completed in downtown Indianapolis since the year 2000.  Where is the revenue those endeavors should have produced?

We'll ask one more time.  Is the fault with the much-maligned township assessors?  Or does it lie, to a very significant degree, with the intentionally adopted policies alleged to be for the purpose of "economic development?"

There has been development.  We'll grant that.  But the economy of the municipality still has its nose against the window of the ice cream parlor while the developers on the inside are enjoying their banana splits!

A scary idea

At the end of an interesting, and we think realistic, column in this week's Indianapolis Business Journal (IBJ) about Capital Improvement Board (CIB) finances, the author makes the following suggestion about possible legislative action.

"That's why this is expected to be wrapped up in the budget.  On the final day for bills to clear committee, Sen. Luke Kenley, R-Noblesville, will unveil his (two-year) budget proposal in the Senate Committee on Appropriations that he chairs.  The panel will pass it that day, and, on tax day, April 15, you can expect the full Senate to do so, on a split vote.  There will then be two weeks until adjournment, and the game(s) will truly begin."   (Our emphasis.)       

And at this point we predict the content of the legislation applying to the CIB bailout will become pretty much lost in the same kind of "panic" discussion we just had in Washington.

"We don't have time to review and get bogged down in all that local stuff," they'll tell us.  "We have to have a state budget," they'll tell us.  "We gotta' get this passed," they'll tell us.

What they won't tell us is any itemization of the "goodies" (earmarks?) - or cost thereof - they have stuffed into the budget to win votes from out-state legislators in order to bail out the CIB.

Nor will there be any effort to reorganize and/or rein in the operate-in-secret, spendthrift CIB itself, and we'll wind up putting more millions of dollars into the hands of those who have run the board into debt for a decade.

We would make at least one demand on Sen. Kenley.  Write a provision into the bill requiring the revenues from these supposedly dedicated taxes to be used for the stated purposes, with an annual report of such activity to be issued directly to print and electronic media in the city of Indianapolis. 

We really, really don't want to erect yet another building while still in debt for two previous economic white elephants!

Wonders never cease

The headline on today's editorial reads, "Stop the clock; Spending on sports out of control."  We suppose that's what folks in the business call "breaking news."  The only trouble is that the clock is far from being an accurate timepiece.  It, and the spending, should have been stopped about 25 years ago.

Then the headline on the section called "Behind Closed Doors" says, "The $5M question goes unasked."  Reference is to the fact that a state senate committee is said to have lobbed a bunch of softball questions to the president of the Colts as to the team's willingness to put $5 million in the pot to help with the CIB problem.

We're told that reporters did ask the "big question" after the gentleman left the committee room.  But, unfortunately, they apparently were ready to settle for the brush-off.  He said the Colts will talk to "elected officials" as the "appropriate people."

Despite the fact that much has been made of the secret talks between the teams and officialdom, it seems not to have been suggested that the purpose of the media is to get information to the people, and that, in this case, the taxpayers are very much the appropriate people.  The media did ask the question - just not very effectively.

Then we had a letter to the editor from a gentleman who says the paper's "stunning stance" about reopening negotiations with the Colts is "outrageous."

He goes on to say, "After two years of (secret?) negotiations, the Peterson-Glass CIB new stadium lease was exactly all that the city wanted."   (Our question.)  We respectfully ask the gentleman to define his use of the word "city."  The contract may well have been to the benefit of Peterson and Glass, but the present fiscal situation negates any possibility that it was what the "city" wanted.

We are pleased about one thing.  Two days after our last post, wherein we suggested a complete overhaul of the CIB itself, the paper did run an editorial offering the same thought.  If we're not on the same track, it must at least be parallel!

Sorting out facts

In the midst of all the hullabaloo about "bailing out" the Capital Improvement Board (CIB), due to still more mis-information, we believe most people are still missing the point.

The major factor is the insistence of the giveaway proponents, aided and abetted by the media, in throwing around revenue estimates which combine sports and convention activities.  Pacers' attendance is miserable and the Colt play in town 10-12 times a year.  The loud proclamations that the city will disintegrate economically with the loss of the Pacers and/or the Colts is complete baloney.

The Pacers have apparently lost money, according to their bookkeeping techniques, for most of their life.  Lack of attendance certainly does not indicate an interest on the part of even their fans to worry about their presence or absence.

(Now it is reported they will "kick in" $5 million as the city picks up an additional $15 million they are now paying.  A net gain of $10 million for them.  Man, that CIB is a bunch of really hard bargainers!!)

Economic studies have shown, time after time, that sports franchises simply reallocate local spending rather than bringing in outside money.   Conventions do just the opposite.

But the fact is that the stadium was built for the Colts.  We were fed lies upon lies about the usage of the stadium.  Football was almost incidental.  It was going to be in almost continuous year around operation with conventions and special events, they said.  If these had been true statements, we would not now be hearing mutterings that the place might have to be "shuttered" if the Colts pull another sneak move. 

If the spendthrift CIB had had the guts to expand the convention center while modernizing the RCA Dome - at a fraction of the debt to which the city is now committed - present discussions might never have had to take place.

Current tax increase proposals seemingly will endanger the convention business - the real money maker - in order to maintain the fiction that we are a "world class" city because we have professional sports.  We can only wonder if the folks at the convention center realize how much of a patsy they've been made in this whole charade.

We'd make one further comment.  Prior to, or at least simultaneously with, any financial assistance, we believe the taxpayers should - and would, given the true facts - demand a complete reorganization of the Capital Improvement Board itself.

It is fiscal insanity simply to put more millions of dollars into the hands of the same people to follow the same irresponsible practices.

Once more

We'll take one more crack at the deal - despite the fact that the word on the street is that the "closed doors" will open some time this week and we'll be told what our "leaders" have decided on how to finance their playpens.

Last Sunday's editorial repeats the same tired old claim that the whole state owes downtown Indianapolis a living.  This while knowing that the Capital Improvement Board (CIB) is already siphoning off millions of dollars of what should be state revenues.

The editorial says, in part, "The General Assembly must not abandon Marion County...."  We've commented on that relationship in earlier posts. 

And, "With the state's blessing, the city is now building a convention center...."  (If a teenage son borrows dad's car and hits a tree, was that done presumably with "dad's blessing?")  We would venture to say, again, that downtown proponents are intentionally mixing the benefits of convention business with sport subsidy.  There is little or no connection.

The closing paragraph says, "Indiana simply isn't rich enough to tell hundreds of thousands of visitors...that Hoosiers don't need their patronage."  Realistically. we would delete everything after the word "enough" and add "to subsidize billionaire owned businesses with hundreds of millions of taxpayer dollars."

Another column in the same issue of the paper was an extensive interview with former mayor Hudnut "...about tough issues facing cities such as Indianapolis."  (We'll admit our bias up front in that we believe Hudnut's ideas about "world class" cities are the basis of much of our problem.)

In a somewhat free-flowing discussion of these municipal problems, Hudnut has this to say.  "That's part of the paradox in America right now: People want the services, but they don't want to pay for them."  Unfortunately the author of the column offered no comment on this thought.  Nor did a fairly intense scan of the column reveal the words "basketball," "football," "sports," or "stadium." 

We don't see how Hudnut could be much more in error.  Most people do not object to paying for adequate, reasonably efficient municipal services.  What most people do object to is the expenditure of hundreds of millions of tax dollars on a wide variety of subsidies and giveaways mis-labeled "economic development," a good many of which tend to reduce municipal revenues, and then being told the city cannot afford more police and fire presence, badly needed improvement in the sewer system, street maintenance, etc., etc..

But, just wait a few days.  Our "leaders" will throw open those closed doors and we'll be told, once again, what we owe.  And, probably, how lucky we are and how happy we ought to be that they're looking after our welfare with such great solicitude.