Tax proposal could raise ticket costs

INDIANAPOLIS (WISH) - The Indianapolis City-County Council may approve a tax that raises the cost of tickets at Lucas Oil Stadium.  It might also raise the tax on car rentals in Marion County.  The issues are scheduled for a vote at the council meeting Monday night. 

City-County Councilor Ben Hunter calls them difficult decisions, forced by deficits the council needs to fill -- especially in public safety. 

Taxpayers pay for "outbound traffic control for any of the games, security for those [Colts] games," Hunter said.  "These are things that have come at a price.  When we're doing that, we're depleting neighborhood resources and neighborhood patrols." 

The new taxes would direct several million dollars toward those needs.

"Any time the T word is used, Taxes, it draws a lot of attention," said Chris Gahl of the ICVA, the Indianapolis Convention and Visitors Association.

The ICVA analyzed both proposed tax hikes. Gahl told 24-Hour News 8 its Executive Board concluded "these two tax increases would not prohibit or inhibit Visit Indy to book additional conventions and meetings. 

24-Hour News 8's Eric Halvorson interviewed both for a radio interview on My 107.9.

NO OBJECTIONS FROM ICVA

Gahl said 75,000 people get their paychecks from the Indianapolis tourism industry.  So, the city would not want to do anything that might be detrimental to their incomes.

Indianapolis is routinely acknowledged as an affordable and walkable city when compared to its competition in the marketing of conventions. 

"Even with these taxes in place," Gahl said, "we're still very affordable.  We're middle of the line."  He predicts that "would not go away," if the council approves the tax hike proposals on Monday night.

The ICVA's connection to the Capital Improvement Board can't be separated from the tax proposals.  Gahl said the CIB provides 60 percent of ICVA funding.  So, the Convention and Visitors Association supports "strategies that ensure the long-term stability and health of the Capital Improvement Board because it directly impacts our ability to market the city and drive economic impact."

History is on the side of the hikes, Gahl said.  He recalled a study in 2004 which was used to support an increase in the ticket tax, food and beverage taxes, the car rental tax and hotel taxes.  The increases approved then allowed the construction of Lucas Oil Stadium and a bigger convention center -- financed primarily by tourists, Gahl said. 

He suggested the circumstances are similar now, since Indianapolis would rely on visitors to fund other local needs.

COLTS CONCERNS

The Indianapolis Colts sent a representative to a committee hearing, earlier this month, where the tax proposals were discussed.

Attorney Dan Emerson expressed a concern that a new tax would raise the price the team charges. 

"We sincerely believe that a bump in the ticket price would hurt us, would hurt our fans, would hurt the city of Indianapolis -- would hurt all of central Indiana."  He speculated that more-expensive tickets would lead to television black-outs of local games.  "One black-out will eventually lead to lower enthusiasm which leads to lower ticket sales.  And, if you have lower ticket sales, you're going to have less admissions tax anyway."

Councilor Hunter said he is not worried about that. 

"It's not a huge increase," as he sees it.  "It's not one of those killers that's going to happen, to where people are going to say I'm just going to quit and not have this type of entertainment.

Gahl agreed with that assessment, noting that the Colts -- and the Indiana Pacers -- generate regional tourism and attract national media attention to Indianapolis.  With all of that in mind, Gahl said "there is a ceiling with [taxes] and we should be careful." 

The Colts' Dan Emerson compared a new tax to killing the goose that laid the golden egg.  But, Ben Hunter advised finding a balance between the teams, tourism and taxes.  He said people won't go downtown to buy tickets, If we don't have a safe city.

Halvorson asked a sports marketing expert, Professor Larry DeGaris of UIndy, about the impact of ticket taxes.  He said the additional cost might limit a team's ability to raise its prices "but I don't think it's killing any geese."

DeGaris said fans are accustomed to paying convenience fees when they order from Ticketmaster.  Adding those fees to the cost of parking and concessions, he said "a ticket tax is a very small portion of the total spending."

About Emerson's warning of black-outs, DeGaris said, "I don't think a playoff-contender Colts team featuring a young star quarterback is going to get any blackouts any time soon."

PREDICTIONS FOR THE PROPOSALS

Ben Hunter said these proposals are not subject to partisan disagreements.  So, he predicted the ticket tax will pass more easily than the car rental tax proposal. 

"Most councilors are on board" with the first.  The second, the car rental tax, is "iffy."

The problem with the rental tax could be a misunderstanding