INDIANAPOLIS | A proposed bailout for Indianapolis' pro sports stadiums would not only double state liquor taxes, but also allow the capital city to siphon away $6 million a year in state sales tax.
State leaders repeatedly have rejected similar financing ideas for Northwest Indiana projects.
The most recent denial came in December, when Hammond Mayor Thomas McDermott Jr. suggested steering sales tax from his city's Cabela's outdoors super store toward completion of Little Calumet River flood protection levees.
"It seems to me that it's more important to build football stadiums than it is flood walls," McDermott said Thursday. "That's been sort of the rallying cry up here."
Sen. Luke Kenley, the Noblesville Republican negotiating the stadiums deal, rejects McDermott's comparison.
Indianapolis currently is allowed to commandeer up to $16 million a year in state taxes to finance construction bonds for Conseco Fieldhouse, Lucas Oil Stadium and an ongoing Indiana Convention Center expansion.
But the Indianapolis Capital Improvement Board, which runs those facilities, has racked up a $47.4 million operating deficit, in part because the board cannot afford higher costs associated with the new larger Colts stadium and sagging Pacers admission.
The liquor tax is part of a rescue plan, now before the state Senate, that also would allow Indianapolis to keep $6 million more a year in sales tax generated by a downtown Marriott Hotel being built by Crown Point billionaire Dean White and another developer.
Kenley said, "The absolute only reason that the Marriott Hotel is being built is to provide the 1,600 hotel (rooms) to accommodate the expanded convention center. The Cabela's example doesn't represent the same thing at all."
Officials say the $275 million convention center expansion will allow Indianapolis to book at least 75 major conventions a year and 800,000 hotel room nights, up from the current 40 conventions and 500,000 room nights.
Meanwhile, Kenley and Republican Gov. Mitch Daniels' administration argue it's bad policy to divert taxes from retail projects such as Cabela's because those developments tend to cannibalize competitors, rather than grow the tax base.
McDermott is upset that region legislators refuse the Little Calumet River levees -- which need up to $15 million -- any state money unless Daniels is given complete control of the commission that oversees the two-decade-old project.
"Indianapolis is getting millions of dollars in new revenue. Does the governor get total control over the sports authority? I don't think so," McDermott said. "But when it comes to Lake County there has to be total dictatorial control from Indianapolis before they'll spend a penny."
