Kenley set to drop CIB bombshell

April 1, 2009
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kenleySen. Luke Kenley will introduce his plan to solve the $37 million Capital Improvement Board revenue shortfall to area reporters today at 5 p.m. at the Statehouse. But mums the word. Reporters will be under a voluntary gag order until midnight.

At 9 a.m. tomorrow, Kenley, a Noblesville Republican who is a key fiscal leader in the Legislature, will introduce legislation that will raise enough money to solve short-term and long-term expense issues at Conseco Fieldhouse, home of the Indiana Pacers and Lucas Oil Stadium, home of the Indianapolis Colts.

The proposal will also likely raise a fair bit of controversy. There’s a lot at stake—and not just for the Pacers and Colts.

“Everybody knows about the Indiana Pacers and Indianapolis Colts, and these politicians are going to want to be able to go back to their constituents after the [General Assembly] is over and tell them I saved the Pacers and Colts, but didn’t cost you a dime,” said IBJ political reporter Peter Schnitzler. “This will be the big issue discussed at this meeting.”

Kenley’s proposal will likely include a broad range of tax increases, that are likely to be offered by Kenley as having little impact on Indiana residents. Among the possibilities are increases in taxes on tickets to all events at Conseco Fieldhouse, Lucas Oil Stadium and Victory Field; in addition to alcohol, hotel rooms and restaurant meals statewide.

Kenley's proposal will need short-term money-raising mechanisms for bond issues and long-term money raising mechanisms for operating costs at the playing venues. The Pacers are asking for $15 million annually to operate Conseco Fieldhouse and the CIB is facing a $20 million shortfall to operate LOS.

There is also likely to be a bone or two in Kenley’s proposal for outlying counties—to quell the squawking about non-central Indiana resident paying to fix Indianapolis’ problems.

One other thing Kenley is likely to propose; some sort of financial support or concessions from the Colts and possibly even the cash-strapped Pacers. The non-football revenue (about $3.5 million annually) the Colts get from LOS is likely to be targeted. Heaven only knows what the Pacers—who are said to be losing $30 million this year—could offer up.

Even after Kenley drops his bombshell, one big question will remain. How much cooperation will Kenley get from Democrats? Since Republicans hold a Senate majority, the bill should sail through that chamber. The House, however, is controlled by Democrats. Unless Rep. William Crawford, D-Indianapolis, or Rep. B. Patrick Bauer, D-South Bend, is standing nearby with a smile on his face when Kenley makes his announcement, taxpayers should expect some rigorous debate, if not outright acrimony in the days and weeks to follow.

While Crawford and Bauer, the House Speaker, wield plenty of power, Kenley is no lightweight. Kenley, as one of the architects of the original deal to build LOS and the pact that put slot machines in Indiana horse tracks, has a record of solving difficult issues and standing toe-to-toe with adversaries when necessary.
  • Anthony, You are mistaken to think the Democrats would stand in the way of this bailout. The Democratic Party in Indiana is totally in the pocket of the Simons. The millions they've lavished on the party and its candidates in the past haven't gone unnoticed. The Republicans take care of Jimmy Irsay (Kenley has pocketed thousands of dollars in contributions from him) and the Democrats take care of the Simons.
  • While I appreciate Kenley's efforts, where's Greg Ballard in all of this?
  • Good point, Gary. I kind of feel like the taxpayers are getting team tagged in this deal. Who will represent us? I'm still waiting for more Pacers financials information.
  • Nice thought about the mayor, but isn't that obvious?
  • Gary, the scenario you paint is an interesting one, and one I know has some merit. But the one thing I learned in the decade that I covered politics prior to coming to the IBJ is that when it comes to Republicans and Dems, there's always some middle ground with which to squabble over. And if one side is protecting the interests of the Pacers and the other is protecting the interests of the Colts, that in and of itself could bring the two sides at loggerheads. The agendas of the Pacers and Colts don't always square.
  • The Mayor is out doing photo ops at the Extreme Home Makeover site on the eastside.
  • I see your point, Anthony; however, I think their agendas of the Colts and Pacers converge on providing more taxpayer dollars to the CIB with which to play. Everything else falls into place once they have access to those additional dollars. That's the way it has always been. On the bond financing of the CIB, this needs to be investigated. The CIB required an emergency state loan last year and has been caught up in rising interest rates from interest rate swap agreements (what happened to long-term fixed rate bonds?). The same thing happened over at the water company with costly results for the public. The public has been given no details on why and how this happened. We're told the Pacers are losing money. Where are the audited financial statements for us to review?
  • I'm confused.

    The greater good in all this is supposed to be that we preserve a snazzy downtown environment for our convention buisness. But aren't the increased hotel taxes, rental car taxes, and food and beverage taxes going to drive away our conventioneers just as quickly as a not so snazzy downtown?
  • Point taken Gary. Thanks for reading and posting interesting comments. Keep them coming. Here's to more information being provided on all fronts. Joe, you ask a real chicken/egg question. It can be argued that hotels, restaurants, etc. are some of the biggest benefactors of these downtown facilities. Therefore, the taxes derived from revenue of those operations should go toward those facilities. Those facilities are in fact what in part attract a lot of those visitors. But, as you pointed out, there's a very fine line, and if you believe the area's hotel and restaurant operators, we're approaching the line of having taxes high enough to scare off visitors, convention-goers, etc.
  • This is ludicrous. Bailing out poorly managed professional sports franchises with taxpayers funds while the owners fly around the country in their private jets knowing all the while that local and state governments will bail them out. Again. This needs to stop. Irsay and the Simon's need to come up with some of the money they have hidden under the mattress and need to have a definite plan of action as to how they are going to turn this around before they receive any more taxpayer funds.
  • Reporters: spill the beans ASAP. We deserve to know what the elected officials that serve at our pleasure are up to, especially with our tax money.
  • This city has been a pretty busy convention town since the 1890's. Two primary reasons: Central location and relative affordability. Well, we're still centrally located--but hardly affordable. We are now one of the top 3 most expensive destination cites...soon to be at--or beyond NYC. Somebody better build an ocean or a mountain range cause baby,...this ain't NYC, Chicago! Ask the FFA-headquartered here. They've booked Louisville because of $$$.
  • George - Can you cite a source to back up your claim that Indianapolis is now one of the top three most expensive destination cities? A quick Google search proves that quite the opposite is true. According to Forbes Magazine, Indianapolis remains one of the most affordable cities in the U.S. To imply that we'll be more expensive than NYC in the near future is a joke. Wait a minute, it *is* still April Fool's Day, right? Good one! :)

    As for the FAA, if $$$ were the issue, as you put it, they would have moved their annual convention to Louisville on a full-time basis, rather than bothering to share it with the Circle-City.
  • I think it may very well be that our hotel/motel tax rate is one of the highest, but does that matter if our hotel rates are significantly lower than those in NY and Chicago?
  • I think many in the public arena want to blame the Pacers and Colts for much of these troubles. But they are business just the same, and to capitalically gain advantage in your lease, building and market are what all businesses are about. I blame the CIB. For too long they have cowered under the pressure to get and keep these .500 level entertainment entities in town. When was the last time you and I had the opportunity to tell our boss/bank/landlord/board to value us more or we will take our toys home? Exactly. Only in business can you legally try to screw your competitor and then smile about it on the way home. The CIB needs to stand firm, act like a business and run itself with greater focus and responsibility... or it need s to go away. better people run quiet businesses everyday and can be found to do this as well. Good luck in getting your help fellas, just don't ask for my taxes.
  • An interesting thing will be this. The State Legislature seems to be acting like they do not like this. But City and County governments throughout the State will be wanting the extra tax money from the increase in alcohol taxes. The State Legislature listens to local government since most came from their ranks. Just look at the recent vote or lack of one on government consolidation because local governments did not want it.

    As far as the FFA, cost had little to do with their decision. They stated that they liked the big city feel of Indy, but also liked the country feel of Louisville. They never said anything about cost. Any cost difference would be quickly made up by transportation costs and time lost going between widely scattered venues and hotels.

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  1. On my rental property, before tax caps, I was paying $2,000/yr in property taxes. After the tax caps I'm paying $4,000/yr. How exactly am I "benefiting the most"?

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  5. So the GOP legislature passed a bill that gave big breaks to business at the expense of Indiana families. Color us not surprised.