Indy Tax Dollars

Let's face it

Let’s face what is euphemistically called the "small market" problem of some teams in the National Basketball League.  Let’s face the facts - which are sometimes hard to come by.

To start with, yesterday’s morning paper ran a front page, above-the-fold story which said that the Simon brothers "built" Conseco Fieldhouse.  Not true.  The taxpayers built the fieldhouse.

If a charitable assumption is made that the reporter is, 1) new to the city, and 2) reprinting material from a random press release without checking it, we are still unable to understand how such a factual error passed any semblance of copy check.

This morning’s paper carries 2 corrections on page A2.  Neither refers to this material.  The offending wording does not appear in the on-line version of the story.

This morning’s paper also carries a story - on Page C4 - concerning NBA finances resulting from the recent labor agreement.  Approximately one third of about 15 column inches of the story tells us of the continued need of the Pacers basketball team for taxpayer subsidy.

The story admits that we are completing a donation of $33.5 million over a 3-year period from the Capital Improvement Board to the Pacers.  (This paragraph does refer to the CIB "owning" the building, without reference as to how that came about.)

One of the owners is quoted as saying, "It’s never been the Pacers are losing money.  Part of the reason we’re losing money is because we’re having these arena expenses that most other teams don’t have to deal with."  The implication is that the taxpayer is facing an-ongoing subsidy of at least $10 million annually forever.

Professional basketball is a business.  The Pacers team is a business.  An entertainment business.  In Indianapolis it is a business that operates in a $170+ million dollar palace for which it pays $1 annual rent, but which generates not one penny of property tax revenue.  The team receives all revenue generated by the building, basketball and non-basketball.

One thing appears to be quite obvious.  Professional basketball has priced itself into oblivion.  The owners of the local team are brilliant businessmen who own and operate shopping malls all over the world.  When a mall becomes an economic problem, they get rid of it.  Apparently it is assumed that they have covered multiple annual Pacer losses out of good will toward the city, but now can no longer afford to do so.

Considering the current financial situation of the city - to say nothing of the fact that there is serious consideration of assuming another half billion dollars worth of debt for transit improvements - it is fantasy, bordering on lunacy, to suggest the taxpayers take on this continuing, and probably ever increasing, burden.

We suggest Indianapolis give it’s heartfelt thanks to the owners for their contribution to the city, and also give them every assistance in trying to find a way to get rid of this economic white elephant.

We would then further suggest that some part of next year’s $10 million be dedicated to financing an aggressive program designed to book other events into the fieldhouse.  Events which would generate much needed municipal revenues.

Two items of interest

Imagine our embarrassment!  In a front page article in the morning paper about the possible re-naming of Conseco Fieldhouse we found the following information. "Conseco Fieldhouse, built by Mel and Herb Simon, opened in 1999 when the Pacers moved from their former home, Market Square Arena."

All this time we’ve been finding fault with the city subsidizing the Pacers, under the misapprehension that public funds had been used to build the palace in which they perform.

Our apologies to all concerned.  The next time the Pacers say they are losing money and want more tax dollars, we’ll try to remember not to complain when the city’s response is, "How much, and do you want that in small unmarked bills?"

The second item also concerns sports dollars.  In the IBJ, under the headline, "NFL’s new TV deals big score for Colts," the first paragraph reads as follows: "National football League owners on Dec. 14 announced a package of network television deals that should assure the Indianapolis Colts and the league’s other franchises will be financially viable through 2021 without selling a single ticket, suite or sponsorship."

We suggest the city very quickly get to the head of the line here.  Before the fans start asking for lower ticket prices, someone representing the taxpayers should start demanding that the Colts/CIB contract be reopened immediately.

At the very least, operation and maintenance of the stadium should be the responsibility of the football team for which it was constructed.  The new TV money should also preclude the awarding of any non-football revenue to the team.  And there are undoubtedly other less apparent areas available for audit.

Naturally, the team will suggest that a contract is a contract, and that any move to cost it revenue might cause it to consider a move.  In which case, it would be appropriate to give the owner the telephone number for the Mayflower Transit Co..

Of course, he may still have that in his Rolodex!

Details

We’re trying to sort out those which may include "the devil."  Reference is to some of the details of the hugely expensive public transit plan now being given the ultimate hype and PR by local movers and shakers.

Some of those "details" were discussed in this morning’s paper.  At least one was passed over rather lightly.  This bothered us.

Under a section labeled "The Plan" we found this wording.  "A new multicounty transit authority would take control from IndyGo, and the traditional fleet would be expanded from 122 to 232 vehicles."

The next 4 sections of the article are headed "The Details," and refer to "Bus Rapid Transit," "Express Bus Routes," "Commuter Train Service" and "Bus Circulator Routes" which would provide additional service at  "transit stops" to those riding the special services.

Color us cynical, but we worry about a single, casual reference to 110 new buses for IndyGo, (with IndyGo as an organization to be replaced by the above-mentioned "transit authority"), being followed by 4 paragraphs indicating service which will be added almost entirely for the convenience of inter-county commuters.  Especially when the governing body is to be "multi-county" in make-up, and presumably will also decide on the priorities of all phases of the project.

The up-coming session of the General Assembly will be asked "...to approve legislation for funding, a transit governance structure and a referendum."  The precise wording of any referendum is critical.  We would hope that the wording would be specified by the legislation itself.  (Preferably something more than "Should Indianapolis have better bus service?")

Just what will we be voting on?  Will the referendum specify the specific tax, a maximum rate and indicate dedication of the revenues?  Will the "governance structure" be on the ballot?  If not, will the legislative push by proponents demand the presence of elected officials who can be held accountable for the fiscal decisions of that structure?

It is, or should be, obvious that we can’t afford another Capital Improvement Board handing out tax dollars. Nor do we want a redevelopment commission turning entire counties into one big TIF district.

It is imperative that the voters know as precisely as possible where, how, why and to what extent the proposal will be using public money.  Lacking such information, and/or an inability to hold elected officials responsible for expenditure of public funds, the only reasonable vote on the entire proposal is "NO!"

Another look...

...at transportation matters.  This time we’d like to take a look from the standpoint of needed versus nice, and which should be subsidized versus pay-as-you go.

From our perspective, "needed" is represented by an intra-city bus system which would enable all citizens to be able to make ordinary trips about the city - to work, shopping, entertainment or family visits for instance.

"Nice" is represented by a system which provides special treatment for those who choose to live in suburbia but who do not wish to pay the cost - or at least the full cost - of the inconvenient travel this choice requires.  (As one old enough to remember the term "urban sprawl" being the equivalent of "sacrilegious" among planners, we would issue at least a partial caveat of the use of the word "nice" here.)

A part of our concern is geography.  A map published on December 13 shows 8 transit routes of various kinds crossing into Hamilton County or being located along the Marion/Hamilton county line.  We can only wonder how ridership on public transit will be affected by the eventual completion of the billions of dollars worth of highway improvement and expansion currently under way or in the planning stages for that same area.

We’ve seen figures telling us that rider fares usually generate only about 25% of operating revenues for public transit.  As we have previously noted, this means that every time a rider spends $50 for fares, the taxpayers will have to come up with $150.  With a total annual operating cost for all types of bus estimated at $110.7 million, that puts the local taxpayer on the hook for about $83 million a year from the start.

One bit of irony occurs to us.  The city of Indianapolis has used taxpayer subsidy to try to encourage downtown living.  Now we’re going to shovel out more huge stacks of taxpayer bucks to make it more convenient for the suburban resident to get back and forth.

Would it be too much to ask public officials to make up their d....d minds before loading on new taxes?

Which are we?

The amended proposal for transportation facilities which was released this week brought this subject to mind - among others.

The specific part of the program relevant here is the concept - passed over very lightly as though already an acceptable and done deal - that the lucky citizens of Marion and Hamilton counties will be the very fortunate beneficiaries of some $600 plus million "free" tax dollars.

That, of course, is the money we will get from Uncle Sugar.

This causes some confusion for those of us who have always failed to understand why the actual source of this bounty is taken so casually.  Particularly in light of the current discussions in Washington about the need to curb federal outlays, we also wonder whether such sums really will be available.

Actually, we suspect they will be, based upon the activities of our own "conservative, self-reliant Hoosiers" who support this proposal.

We realize that $600 million is only a drop in the bucket when talking money in Washington.  But it does occur to us that, when we go for "our share," we are automatically justifying the same kind of largesse to be made available to every other county or city in all 50 states.

One has the impression that a good many very intelligent people think the nation is on the financial brink.  Is this the time to ask for additional spending?  Is it ever the time to ask taxpayers all over the country to pay for the solution of local problems?

Because, whether we will say it openly or not, local transit is a local problem. "Better service will make us more competitive."  With whom?

In the never-ending, circular system, federal taxes paid in Indiana will help a bus system in Florida, where federal taxes will go for a bus system in Michigan, where federal taxes will go to rapid transit in California, where federal taxes will...! Each time with the federal "dipper" taking its share.  You get the idea.

We need very serious review of priorities for all expenditures of tax dollars here.  (Is an additional annual $10 million gift to a basketball team important?  Well, maybe so if they insist on paying a young man $20 million for playing a game for 2 years.)  We should come up with a program which will benefit those citizens who most need an efficient intra-city transit system, break the concept down into phases which local taxpayers can handle, and go from there.

We continue to believe that very few people are seriously opposed to support of our government by paying taxes.  What raises the hackles is the absolute waste of the money on schemes which will benefit a very small percentage of those making the contribution, or are not the real responsibility of government to begin with.  (It's the spending, stupid!)

Supporters of the transit proposal throw around terms like a "backward state" or the need to "move into the 21st century" or to be "attractive."  Doubters may question with words like "economical" or "self-reliant" or "practical" or "necessary."

Which are we?

One thing...

...leads to another, particularly when one considers governmental activity.

In this case, the "one thing" is the proposal from the city of Carmel to construct a roundabout at the intersection of 96^th Street and Keystone Avenue.  The stated purpose is, of course, to remove congestion and initiate a more efficient traffic flow.  Certainly a laudable goal.

It is our understanding that Hamilton County (and its municipal units?) are responsible for maintenance and operation of 96^th street as the boundary between Marion and Hamilton counties.  So far, the mayor of Carmel is the only public official we have seen with public statements about the project.  Highly in favor, naturally.

Assuming that the proposed changes would look something like others which have taken place along Keystone Ave. a little farther north, it would seem that a significant amount of property, currently occupied by active Indianapolis businesses, would be bulldozed into ramps and bridges.

Some differences of opinion have arisen, and we’re curious.  Has official approval been signaled by Indianapolis mayor Ballard?  Is Indianapolis already, secretly, in the mix?  Will the policy of eminent domain come into play?  Can the mayor of Carmel use that policy involving property in an adjacent city?

Will someone in the news media consider these questions worth asking?

The "another" to which we are led is the same old question we’ve raised several times ourselves. Additional taxes for suburban transit?

As we understand it, there are multi-million (billion?) dollar projects already under way, or for which there are definite plans, or which are being suggested/considered.  North Meridian St. (U.S. 31) is to be made limited access with accompanying interchanges, etc.; the 96^th/Keystone roundabout; a new Allisonville Road bridge over I-465; and a huge new interchange at I-69/82nd St./I-465.

Can anyone involved offer a sensible explanation why, upon completion of these endeavors, anyone living north or northeast of this city would find it worthwhile to abandon the individual automobile?  Will the individual who can park within a block or two of the actual destination really ride an express bus or light rail to a terminal 5 or 6, or more, blocks away?

We admit to not knowing how to factor in our mayor’s program for increased parking costs.  And a direct, rapid transit line from "Palladium to stadium" might still be a potential "loss-leader."

But is this really the time to trying to rouse popular support for an unspecified tax increase to fund a project which is already years - and billions of dollars - behind in any competition with modern, multi-lane concrete roadways?

Now it’s a different kettle of fish if these folks want to start the project piecemeal with complete renovation of the IndyGo system to be begun and finished first.  Preferably with funds not shoveled out to the Pacers, the Colts, the Super Bowl and miscellaneous real estate developers.  That we could support.

Variety

Lots of subjects worthy of comment!  Thursday morning’s paper carried a column in which the author proclaimed that Indianapolis is not Chicago and that we ought to quit trying that route while working to improve what we do have and simply being glad to be who we are.

We have to give a hearty "Amen!" to that one.  Has to do, we believe, at least partly with that municipal inferiority complex we have mentioned a few times on this website.

We also have to agree with a column in the new IBJ which hit the mailbox yesterday.  The headline is "Needing a recovery of real journalism."  The author’s penultimate paragraph tells us this.

"In a world that is changing as rapidly and dramatically as ours, the importance of real journalism - not ‘infotainment,’ not talking heads, not bloggers, not columnists, but actual fact-checked, verified news in context - becomes immeasurably more important."

As an octogenarian blogger with a Will Rogers approach - "All I know is what I read in the newspapers." - and with very limited personal facilities, acceptance of the above quote is complete.  We recently congratulated the morning daily paper on an investigative approach.  We sincerely hope that article and this column (hers, not ours) may indicate a forthcoming change in this direction.

Unfortunately, not all the news is good.  The front page of the same issue of the IBJ tells us the not-surprising news that we can probably look forward to a long-term agreement - ten years or more? - of taxpayer subsidy for the Pacers.

A gentleman identified as president of a local "sports marketing firm" tells us the new labor agreement in the NBA may make the team more competitive "...if team management is prudent."

We doubt anyone will describe the owners of the Pacers as being "imprudent" managers, since they have become multi-millionaires through well-known business acumen.

It seems to us then, that the question becomes, "What to do with professional basketball?"  About half the teams claim to lose money.  This is a local situation which, without current subsidy, would require ticket prices covering the full cost of the product being purchased.  Our guess is that the seats, other than those paid for with corporate tax write-offs, would empty faster than a fire drill.  This is an entertainment industry which has priced itself out of economic viability. 

While it is implied that another $10-$15 million handout per year is not worth municipal concern, we are told that the loss of the team would be a financial disaster to the city, with particular reference to restaurants and bars in the area of the fieldhouse, and downtown generally.  We appear to be looking at a miniature of the national concept that we have a private business "Too Big To Fail!" 

The news article tells us that the team, bought in 1983 for $11 million is now (2010) estimated to be worth $269 million.  Without advanced training in either economics or mathematics, we find it difficult to understand how an asset can increase its value 24 times in 27 years while losing money every year.

$10 to $15 million local tax dollar giveaways per year aren't all that "miniature!"  Considering what is happening at the national level with public expenditures, do we really want to head down that route?