No Taxpayer Bailout for Indy Sport, Convention Sites

Published July 1, 2009

The Indiana General Assembly adjourned without bailing out the cash-strapped Indianapolis Capital Improvement Board, which manages the city’s sports and convention facilities.

State House Minority Leader Brian Bosma (R-Indianapolis) reacted angrily to the Democrat-controlled House’s decision not to take up the bailout bill. The Assembly adjourned April 29.

“This is a tremendous mistake, a big mistake,” Bosma said from the House floor.

The legislature’s lack of action also disappointed Indianapolis Mayor Greg Ballard (R) and the city’s business leaders, who were looking to lawmakers to close the $47 million budget shortfall the Capital Improvement Board (CIB) is facing next year.

“I think a lot of people were assuming there’d be something out of the legislature. I think a lot are disappointed,” CIB President Bob Grand said shortly after the legislature adjourned.

High Costs at Stadium

The CIB first announced early last year that the agency would run a deficit after operating expenses from the new Lucas Oil Stadium were much higher than estimated. The CIB already had pared $9 million from its budget in a series of cost-cutting measures. It also attempted to renegotiate its contract with the owners of the Indianapolis Colts, who play at Lucas Oil Stadium, but were quickly rebuffed.

When it became apparent the CIB’s cuts were not enough, Ballard and Grand asked state lawmakers for the city council to be given authority to increase the innkeepers, ticket, and auto rental taxes. They also asked for a one-cent increase in the state’s alcohol excise tax. The latter proposal met with the strongest opposition from the state’s hospitality industry and lawmakers unwilling to increase taxes in a recession.

“This was born out of Indianapolis,” said Brad Klopfenstein, executive director of the Indiana Licensed Beverage Association. He said the entire state should not be held responsible for the fiscal problems of one agency in Indianapolis.

State Senate Minority Leader Vi Simpson (D-Bloomington) said, “It is very difficult to go home to Bloomington and try to explain to people why we all have to have taxes increased to bail out the CIB.”

Eventually the bill was amended to increase the alcohol tax in Indianapolis only, but the package failed to pick up steam. Many lawmakers said they needed to focus their attention on more important issues.

Split Opinion in City Council

Compounding the problem for Ballard was bipartisan opposition on the Indianapolis City-County Council, where many councilors stated they would not increase any taxes even if the state gave them the authority. Democrat Councilwoman Jackie Nytes said funding for the CIB is a regional issue, not just an Indianapolis problem, because many Colts fans live outside Indianapolis and attend games at Lucas Oil Stadium.

The legislature adjourned without approving the state’s biennial budget, so it is certain Gov. Mitch Daniels (R) will call a special session. Ballard said he will keep up the fight and meet with lawmakers to convince them to support the CIB bailout.

In the meantime the CIB board held an emergency session on May 1 at which it voted to suspend all grants for arts and tourism and agreed to explore renegotiating its labor contracts. About 100 citizens attended the meeting, and most criticized the CIB’s cuts and its fiscal management.

“We’re cutting into the bone,” Grand said at the meeting.

Bill Benner, a spokesman for the Indianapolis Convention and Visitors Association, said the issue must be addressed—and quickly.

“We need to go out and sell the convention center. We need to tell clients they can count on the convention center,” Benner said.

Nick Baker ([email protected]) writes from Washington, DC.