Senate panel approves CIB funding plan

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Mary Milz/Eyewitness News

Indianapolis - A bill to double the state alcohol taxes to bail out the financially-strapped board that runs the sports stadiums in the city has passed an Indiana Senate Committee.

An amendment that aims to fix the Capital Improvement Board's $47.4 million deficit passed 10-2 out of committee Thursday. The CIB runs Lucas Oil Stadium, Conseco Fieldhouse, Indianapolis Convention Center and Victory Field.

Here's how lawmakers want to fill the gap.

The Pacers and Colts would give $5 million each. Doubling the alcohol tax would generate $8 million for Indianapolis, and allowing the city to keep sales tax on the new convention hotel would generate $6 million. A hike in the ticket tax is worth $6 million, while an increase in the food and beverage tax would bring in $5 million. The innkeeper's tax would also be raised, with an expected revenue increase of $4 million.

A standing room only crowd came to weigh in on plans to fund the Capital Improvement Board's shortfall.

"The solution is designed so everyone has skin in the game," said Sen. Luke Kenley (R-Noblesville).

His plan calls for the Colts and the Pacers to pony up $5 million each and play along with a four-percent hike in the ticket tax.

"We look forward to working with you," said Bill Polian, Colts president.

But the Colts also indicated they already have a contract and shared in building the stadium.

"First of all, we have a lot of skin in the game to the tune of $100 million that we contributed to this project so I think that's an erroneous statement to say that we have no skin in the game. Secondly, we made it clear that we were willing to engage in dialogue with the appropriate parties and we will continue to do so. We have our views. I'm sure others have theirs. That's what the process is all about. Sen. Kenley made that clear, and we'll continue with that process," said Bill Polian, Colts president.

The Pacers, meantime, shooting for survival, have asked the CIB to pay the $15 million it costs to run Conseco. Their reaction to the plan?

"Really, we don't have any detailed thoughts on any of it. I think it's a starting point. I think there are concepts there and I think there needs to be further discussion and we'll continue to do that," said Rick Fuson, Pacers.

The proposal also calls for letting Marion County raise its restaurant and hotel taxes for the second time in three years. The Indianapolis Convention and Visitors Association already puts Indianapolis hotel taxes in the top five most expensive list.

Those in the hospitality industry also criticized plans to increase the state alcohol tax for the first time in 28 years. The CIB would share the proceeds with other cities across Indiana.

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.

Brad Klopfenstein, executive director of the Indiana Licensed Beverage Association, said doubling those taxes may not seem like a lot. But he said bars that now charge $3 for a beer are more likely to charge $3.25 a glass, not $3.01. The price hike could decrease sales at the 700 bars his organization represents, he said.

"When you're talking about a discretionary product, any kind of price adjustment will have an effect on consumption," he said. "We are an easy target, but one of the few industries that has an excise tax. Maybe they should look at the asphalt industry or the orange juice industry."

He added, "We're one of the few states that has an excise tax so we'd argue we've paid our fair share for a number of years."

Indianapolis Mayor Greg Ballard told the Senate panel that while the solution may not please everyone, most would agree that the money problems need to be solved. Ballard said he did not want to see restaurant taxes increase, and that he wants the city to have "a range of options."

Sen. Earline Rogers (D-03), who represents parts of Lake County, asked how she might sell the plan to her constituents, who are mostly Bears and Bulls fans, and who are facing financial hardships of their own.

While the bill passed out of committee on a 10-2 vote, even the governor predicted changes especially related to the alcohol tax.

"I said I don't think it's the final answer and I think it's one good candidate for change. A better alternative might be a local option and every community could decide for itself," said the governor.

The bill now goes to the full Indiana Senate for consideration or amendments. House Speaker Pat Bauer (D) says the bill will be difficult to pass.

Funding options for the CIB

Tax revenue distribution among counties