Ticket tax hike gaining favor

February 19, 2009
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ticketsI have bad news for Indiana Pacers, Indianapolis Colts and Indianapolis Indians ticket buyers. By the time you buy tickets for next season’s games, you’ll likely be hit with a higher ticket tax. For Indianapolis Indians’ fans, that could come as soon as April. This is coming despite a loud protest by Indians officials that the tax isn’t fair. The Colts too have decried the ticket tax.

As you probably know, the city’s Capital Improvement Board is facing a $37 million deficit. It was $43 million until last week when the CIB hatcheted $6 million out of its own budget. That deficit is mostly due to operational expenses at the homes of the Colts and Pacers.

After talking to state legislators and City-County Council members this week, I’m convinced one of the mechanisms to raise revenue for this shortfall is going to be a ticket tax hike. People buying tickets to sports and entertainment events at Conseco Fieldhouse, Lucas Oil Stadium and Victory Field are already getting dinged with a 6 percent tax. It soon could be 7 percent or 8 percent, maybe even 9 percent. For every 1 percent the ticket tax is raised, that would bring in between $600,000 and $800,000 annually from Pacers, Colts and Indians games. Other ticketed events in those venues would add to the till. Still, a ticket tax is only part of the answer to making up the shortfall, but as far as I can tell, it’s the most popular part. So, despite all the teams’ efforts not to raise ticket prices, those prices will be increasing.

“Of all the potential funding sources, the ticket tax makes the most sense to me,” said City-County Councilwoman Joanne Sanders, Democrat minority leader. “I think true users of the facility should have to pay. The direct use is an important thing to look at.”

City-County Council President Bob Cockrum, a Republican, also thinks an increased ticket tax is a logical option. But he also thinks the teams should pitch in. Good luck with that. And he has another interesting idea. Cockrum said one potential source is a one-quarter of 1 percent income tax on people who work in Marion County, but live in other counties. As a resident of Marion County, that sounds good to me. But I wonder how my co-workers from Johnson and Hamilton counties will feel about that.

Sen. Luke Kenley, R-Noblesville, a key fiscal leader in the state legislature, might have the best take. Or at least the most realistic. When asked about possible funding sources for the CIB’s budgetary shortfall, Kenley responded, “Anything is possible.”
  • Fully in favor of a ticket tax on Colt and Pacer games.

    Think that tax on Indians games is a load of bunk!
  • Who paid for the Indians single use, seasonal stadium? It wasn't the Indians. The Colts and Pacers contributed money to build their stadiums, I do not remember the Indians doing the same. I think a small percentage on all tickets sold not just for sporting events, but all events at the CIB stadiums should be used. A person attending a convention or concert is adding to the cost of running the facilities.
  • We went through this with the Colts already, and I think their lease states that no ticket tax will be established.
  • I'm generally on record in favor of a commuter tax...but not for the stadia. It should pay for the cops, firefighters, streets, snowplows and sewers (i.e. services and infrastructure) that are necessary to serve the suburbanites who work in Marion County. Especially the snowplows and streets: commuters' routes to work are clean and clear courtesy of my tax dollars, while my street goes unplowed.
  • I believe the Indians did pay for a portion of Victory Field. Does anyone have that info? And that's above the annual rent they pay which is more than both Pacers/Colts.

    And the Colts portion (reported $50 mil) came straight from the City for breaking the Dome lease....of which they had to break since we were building a new home for the Colts.
  • I'm really upset about the unfairness of this situation. It amazes me that so many hard working people will suffer because of this. Meanwhile, the Colts sign a slightly above average player in Kelvin Hayden to a huge contract.http://sports.espn.go.com/nfl/news/story?id=3917363. Obviously, a couple million dollars isn't much to them. I think we can re-work their joke of a lease and put a little bit of this wasted money back in the pockets of people who can actually make a difference in our city.
  • I've been asked a couple of times how the $18 million to build Victory Field for the Indians was raised. So here goes. The CIB came up with $9 million. The Indians spearheaded an effort to raise $4 million in private contributions. The Indians $500,000 annual rent covers the rest. The Indians' 20-year lease deal is enough to pay the other $5 million plus interest. Thanks for reading.
  • Boomer,

    I have been through this a dozen times, but once more won't hurt. Colts total contrib is $100 million. $49 million or so up front and the other $51 or so was their payment for the City breaking the lease. The City needed to break a lease that was very favorable to the Colts. The City was to pay the Colts something like $15 to $20 million a year for 6 years to keep them middle of the pack. So the City worked a deal with the Colts to break that lease and create a new one that gave the Colts no guaranteed money. The Colts could have taken that $51 million or so and put it in the bank, spent it on helicopters or whatever. But Irsay agreed to reinvest it into the stadium, something he did not have to do.

    Thanks Anthony for the numbers. So the City paid for half of a single use stadium, private donations (Lilly, etc...) paid for about 1/4th and the Indians through rent picked up the other 1/4th. Of course I assume the City had to put out the Indians 1/4th and pay the interest costs on it. Again, I am fine with the Indians deal, but everyone has to remember, that the stadium is only a single use facility that does not have a major financial impact on Indy, certainly not 1/10th of what Lucas Oil does.
  • So what if Victory Field is single-use? Does that change the fact that the CIB provided a paltry (when compared to Conseco and LOS) 9 million for construction? Does that change the fact that the Indians are good corporate citizens? The Indians have done nothing but create a product in and around Victory Field that is consistent with the values of the city as a whole.

    The Pacers have taken to the airwaves to promote their community contributions ahead of the renegotiation. They boast about the money they have contributed to charities in, among other things, tickets. Wow! They gave away tickets that they could not sell and include them in the gift to the city?

    The Colts refuse to renegotiate (why would they, they already have everything they want) while at the same time continuing a cycle of overpaying players and raising ticket prices!

    Meanwhile, we have the Indians. They pay the lease according to its terms, they pay for the operations of their own stadium, they pay a ticket tax that is already too high as a result of the Colts and Pacers, they make a profit... despite keeping ticket costs flat the last three seasons.

    It's time for the citizens of Indianapolis to stand up for the Indians. Tell the CIB enough is enough!
  • Indyman,

    How stupid do you think people are? The Colts demanded a new stadium or they would move. We did just that. Then the Colts demanded $50 million for breaing the lease on the old place. Then they waive that so they can count that as their contributon to the new stadium. Are you serious? How stupid do you think people are?
  • Indyman,

    So the City had to break the RCA Dome lease because it was too favorable to the Colts? You're kidding right? The Lucas Oil Stadium lease is a 1000 times wore.
  • The Indians also have been dealing with their own operational expenses. Another reason why a tax should not be placed on the Indians Tickets. It's not for the fact of the single-use stadium (Which it isn't anymore, it's used for community events, concerts, convocations and baseball.) But the pacers and Colts have some of their operational expenses of the facility covered by the CIB. The Indians don't. Which is why they have been able to maintain the look and 'newnewss' of the facility because they have done it themselves and not the CIB. Another reason to not tax them extra because the only true CIB contribution to them has been that initial payment many more years ago. Anything that Indians has had in profit has been the result of their operational efficincies and hard work, unlike the Pacers and Colts.
  • So what,

    My point is look at the economic impact the Colts and LoS has compared to the Indians. When was the last time the Indians were a national news story? Or for that matter, even a local one? I love the indians, but they and the single use stadium have a far smaller impact on Indy than the LoS, or Colts.

    Last I read, both the Colts and Pacers are willing to work with the City. Bart made a bad deal when it came to running LoS. He assumed he could push through the casino deal and be rolling in dough. When that failed, he had no plan B to pay for its maintenance. It is not the Colts fault Bart screwed up. How would you like it if you rented an office at a really good deal just to have the landlord come back a year later and want to renegotiate because he screwed up? While it is not the Colts or Pacers fault, I do hope they step up to make up the difference. It will give them both good will in the city.
  • Right on, Paul. This fact was spun big time when announced and some lapped it up. Nice try to make Irsay look good.

    Colts pay $250k in rent. Indians pay $500k. PLUS the Colts receive revenue from all other events held at LOS.

    Indians should be exempt from a tax.

    CIB portion of Victory was paid by selling the naming rights to the Dome to RCA. I wonder who profits from naming LOS? Colts.
  • Paul,

    First question. Show me where Irsay, or anyone associated with the Colts demanded a new stadium or they would leave. I remember quite the opposite. Irsay said several times that he was not looking elsewhere and wanted to stay here.

    Second, show me where the Colts demanded to break their contract? They were guaranteed between $90 million and $120 million with the old contract to be paid by the City. If the city renegged, then the Colts could bolt and still sue the City for breach which could cost much more than the above costs. Instead, they accepted the Cities request to renegotiate it with no guarantees.

    They then give that $51 million back to the LoS on top of the $49 million Irsay also gave. Something they did not have to do.

    I do not agree that the new contract is 1,000 times worse for the city. The number one thing it did was to free the city from making guaranteed contract payments out of the city coffers. You think there are issues now, imagine what they would be if we were forking over $15 million plus in cash from taxpayer funds to the Colts in this economy. And with all that said, we would still be dealing with a too small, out of date stadium that was in the path of the CC expansion. I think the new contract is much better than the old one. As I have stated before, much of the LoS shortfall is short term. With the CC under expansion, the convention business is light. Even less than with the RCA Dome. When it is complete in 2010 and even more so when the JW is done in 2011, the income will increase greatly which will lower the deficit.

    I do not think people are stupid, just uninformed. Many form their opinions from other peoples opinions and not facts. Once the facts are known, their arguments usually go away as do they.
  • The other thing people are not probably grasping is the cost per ticket of this tax. If you raise the tax 4%, the cost for an Indians ticket goes up around .36 cents for a $9 ticket to $1.20 for a $30 ticket. Not sure what the high end ones go for. But in putting that tax in place, it should bring in $2.4 million to $3.2 million.

    With the Colts you are looking at $4 for a $100 ticket. These dollars will not break anyone bank. Couple that with increased revenue in the future from a fully functioning CC/LoS complex and the cost savings the CIB is enacting, and much of that deficit is going away.
  • The Indians have been in town longer than the Colts or the Pacers. Baseball has a long history in this town, which many people have forgotten. Great players, such as Roger Maris, played in this town. The Indians deserve a little respect. They pay $500,000 a year in rent to the CIB and pay for all improvements and up keep. They wanted the freedom to be in control of the upkeep. And, it seems they're doing a great job. And this is minor league baseball. They don't rake in the corporate money that the pro teams do. And I can afford to go to an Indians game. Don't push them around. Max Schumacher is a tough (but fair) businessman.

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