House OKs IMS bill, despite dispute over funding source

A bill to help pay for $100 million in improvements at the Indianapolis Motor Speedway passed the House on Monday—but only on its second try, as some lawmakers expressed frustration about a funding source for the project.

That funding—money now dedicated to the horse racing industry for purses and breeding programs—is actually part of another bill. But several lawmakers viewed the pair as a package, despite insistence by the Speedway bill’s sponsor, Rep. Tim Brown, R-Crawfordsville, that lawmakers should consider the proposals separately.

Rep. Ed DeLaney, D-Indianapolis, asked Brown whether the money for the Speedway improvements would come from horse racing.

“This bill does not do that,” Brown said repeatedly of SB 91, the legislation that would authorize bonds to fund grandstand improvements, lighting and changes to make the Speedway more accessible to people with disabilities.

“But there’s a bill that does that,” DeLaney persisted.

“I’m confused,” Rep. Chuck Moseley, D-Portage, said a few minutes later. And he complained lawmakers weren’t being clear whether there would be a later vote on SB 528, the companion gambling bill that dedicates $10 million for the speedway bond and other auto racing projects.

“Maybe we will,” Moseley said. “Maybe we won’t.”

Initially, SB 91 failed with 48 yes votes and 47 no votes. But because 51 members of the House—a simple majority—did not vote for or against the bill, it was eligible to be recalled for another vote. An hour or so later, Brown did so.

He told lawmakers that he did not mean to be unclear and he said the measure—if approved—would be moving to a conference committee, where members of the House and Senate would try to find a compromise on the legislation.

“People have worked very, very hard to get to this point,” said Rep. Ed Soliday, R-Valparaiso. He urged lawmakers to approve the bill so the last details can be finalized.

The bill passed 56-36 the second time.

SB 528, the gambling bill, passed as well on a 73-17 vote after much less discussion. That bill is headed to a conference committee as well.

As crafted by the House Ways and Means Committee, the bills work in tandem to transfer money from the horse racing industry and use it to help pay off the bonds for the Speedway improvements.

SB 91 also creates a new $1 tax on the tickets for major events at the Indianapolis Motor Speedway and captures new sales and income tax revenues generated there. Those revenue streams would be used to help pay off the bonds.

Under SB 528, the state would also take $5 million annually from money generated by slot machines at the race track casinos and use it to pay the bonds. That’s money currently transferred to the horse industry. The state would then take another $5 million a year from the horse racing fund to use for low-interest loans to other auto racing businesses across Indiana.

Rep. Eric Turner, R-Cicero, said the goal was to help all of motorsports, not just the home of the Indy 500 and Brickyard 400, and boost an industry that employs 23,000 Hoosiers in jobs that pay an average of more than $60,000 per year.

But Rep. Dan Leonard, R-Huntington, said taking money from one private industry to support another is bad public policy.

“How would you feel if we were asking the motor speedway to put this $10 tax on them and give it to the racinos?” he said to lawmakers. “The racinos were in bankruptcy. Maybe we should help them out.”

SB 528 also provides tax breaks to casinos to help them deal with out-of-state competition.

Rep. Sean Eberhart, R- Shelbyville, told lawmakers “to put away the pillow and wake-up” about the impact those out-of-state operations are having on Indiana tax revenues. He said the opening of a casino in Cincinnati has reduced gambling at riverboats in southeast Indiana by a quarter.

“We can’t ignore it,” Eberhart said. “We could’ve been proactive a few years ago. We failed to take those steps and now we’re in a reactive mode with our backs against the wall. We need to give them more tools to work with.”

Eberhart is advocating a change in the gambling bill that would let the state’s horse track casinos add live dealers. Currently, table games are conducted electronically.

That provision was part of SB 528 as passed by the Senate but was stripped out by the House Public Policy Committee.

“This bill isn’t perfect,” said Rep. Terri Austin, D-Anderson, who also supports live dealers. But “it’s what we need right now to keep this process moving.”