Indianapolis mayor's CIB plan leaves food-beverage tax alone

Scott Olson, The IBJ

solson@ibj.com

Indianapolis Mayor Greg Ballard's plan to rescue the city's Capital Improvement Board from an approaching $47 million budget deficit wouldn't raise the local food-and-beverage tax, but it would increase several others already targeted in a bill moving through the state Legislature.

The mayor appeared at the monthly CIB meeting this afternoon and proposed:

- doubling the alcohol tax in Marion County. Indiana alcohol taxes are currently set at $2.68 per gallon of liquor, 47 cents per gallon of wine and 12 cents per gallon of beer.

- increasing the county hotel tax from 9 percent to 10 percent and the car rental tax from 6 percent to 8 percent.

- raising the ticket tax on events at the facilities from 6 percent to 10 percent.

- expanding a sports-taxing district to include areas near the JW Marriott hotel under construction and expanding the scope of the tax to include sales and income tax.

Similar to the plan proposed by Sen. Luke Kenley (R-Noblesville) and approved by a state Senate committee, Ballard also is counting on the Colts and Pacers to each contribute $5 million.

The new taxes and team payouts, coupled with $10 million the CIB expects to cut from its own budget, should be enough to address the shortfall, Ballard said.

"I know there will be a lot of people who will play politics with this," said Ballard, who used an anti-tax campaign to win election. "They can say whatever they want to say, but this is about the downtown convention and visitors business."

Ballard said he chose not to recommend increasing the food-and-beverage tax because he considers it a levy that would affect the general public in Marion County.

His proposed increase in the hotel tax would raise it to 10 percent, or 17 percent when including the 7 percent sales tax, making it one of the highest in the nation.

The CIB operates Lucas Oil Stadium, Conseco Fieldhouse, Victory Field and the Indiana Convention Center.

The mayor, who had been criticized for not presenting a plan sooner, defended himself by saying he waited to determine what the General Assembly would propose first.

Both the Legislature and City-County Council would need to approve any tax increase to help bail out the CIB.

Perhaps the most controversial idea being bandied about in the Legislature is one from Rep. Bill Crawford (D-Indianapolis). He told The Indianapolis Star he would introduce a plan that called for a downtown Indianapolis casino with 1,500 slot machines. He estimated the casino would raise about $20.5 million annually for the CIB.

Ballard said he does not prefer the option and would only support it if absolutely necessary.

The mayor said some of the taxes, particularly the alcohol and hotel levies, could be rescinded within five to 10 years, if the convention center expansion and Lucas Oil Stadium attract more events and generate more income for the CIB.

Following the mayor's appearance, the CIB approved a recommendation from its finance committee to cut another $1 million from its budget. More than $88,000 would be saved by forcing the organization's 81 employees to take six unpaid furlough days - two each a month until July. The furloughs are set to begin later this month.

The additional cuts bring total CIB budget reductions to $8.7 million -- $1.3 million shy of the $10 million target set by Indiana lawmakers.