CIB Bailout Hearing Turns Into Orgy

It's not as if anyone who has followed the Indiana General Assembly would be surprised by the show House Ways & Means Committee Chairman William Crawford (D-Indianapolis) put on this afternoon at a hearing to consider a bailout of the Capital Improvement Board. After hearing pathetic and uninformative presentations from City Controller David Reynolds and some CPA the CIB hired at London Witte totally lacking in substance and believable data, Democrats piled on local economic development initiatives at the urging of Chairman Crawford to the bill to achieve statewide fairness, at least for the State House porkers, if not the taxpayers. In the end, Crawford wound up holding the bill as leverage as the special session continues into its second week after Republicans refused to support the bill as proposed.

Rep. Scott Pelath had an amendment to allow for the expansion of professional sports development areas in other cities like Ft. Wayne, Evansville and Gary, allowing those local governments to capture more state revenues to pay for local pork barrel projects. Rep. Dennis Avery added three hotels and a new Evansville arena to Evansville's PSDA and an economic development initiative for Warrick County. Chairman Crawford added a measure to require Indianapolis hotels located within Indianapolis' PSDA to make public the salaries and benefits they pay to their employees. The public has a right to know this information he insists because the hotels are being subsidized by the public. Oddly, Crawford doesn't think the public should have a right to see the Pacers' and the Colts' audited financial statements despite the supposed need of the privately-owned sports franchises to receive tens of millions in public subsidies annually in order to operate. At this point, I would settle for finding out who all is on the CIB's payroll and the detailed information on their salaries and benefits.

Rep. Cherrish Pryor (D-Indianapolis) undid Gov. Mitch Daniels' plan to combine the CIB into the Facilities Management Board. She amended the CIB bailout bill to reduce the Board's size from 9 to 7, cutting the mayors appointments to just three, increasing the county commissioners' appointments to 3 and leaving one appointment to the City-County Council. She says her plan will make the CIB more accountable, but it looks to me that her division of board appointments allows any one elected official to escape responsibility for anything the CIB does. Pryor also wants to increase the food and beverage tax you pay when you attend an event at one of the CIB facilities. Under her plan, the tax at these facilities will be 14% instead of the 9% tax you currently pay. The additional $1.5 million will be offset by an equal reduction in the amount the City gets from the expanded PSDA, providing for a $6.5 million annual subsidy from the state instead of $8 million. Pryor had one good idea. Her amendment will require tax abatements in Marion County to be approved by the City-County Council after the MDC gives its approval.

Rep. Ed DeLaney offered a fail-safe amendment, assuming the new taxes the City-County Council would have to approve to bail out the CIB are not approved. He wants to give the governor authority to make $15 million grants in each of the next two years to the CIB, which will be funded from either the state's reserves or from township reserves for townships in Marion County and the donut counties. Pryor, who didn't even understand what her own amendment did until the staff explained it to her, thought she knew better than DeLaney and opposed it because it might dip into the Center Township Trustee's slush fund. DeLaney's amendment died for lack of support among Democratic members of the committee.

Members of the Ways & Means Committee pressed a CPA hired by the CIB, Bob Swintz, to be specific on the bottom line sum the CIB will need to be able to stay in business. His best guess is $20-$25 million, or about half what the CIB has insisted for months it needed. Interestingly, the CPA suggested the expanded convention center poses no real cash flow challenges to the CIB. His biggest concern is a $27 million credit facility reserve that comes to a head in August, at which time the CIB will either have to pay creditors $27 million or find that much money to replenish its reserve fund. Despite Crawford's efforts to get Swintz to say there is a date on which the CIB will no longer be able to operate because of cash flow concerns, Swintz didn't take the bait. In fact, he indicated that the CIB had set no date, for example, for sending out letters to convention organizers or the NFL indicating that the CIB may not be able to host their events. Swintz told the committee that he had not had time to review the cost savings analysis prepared for the governor's office and didn't expect to have his review completed until next week.

The absurdity of today's discussion is the acceptance by both Republican and Democratic legislators alike that the State has an obligation to step in and help the Pacers. Why? Lost in the discussion was the earlier legislative condition that the Pacers and Colts would have to contribute $10 million to the bailout plan. Here we are facing the worst economic downtown since the Great Depression and these guys are concerned about giving a $15 million a year public subsidy to the billionaire Simons. Controller David Reynolds tried to convince the committee that the Pacers weren't actually asking for the money, but Rep. Jeff Espich (R) quickly disabused the committee of that notion. He said he met with the Pacers and they were asking for the money.

Ah, someone else in the media noticed. WTHR's Mary Milz reports on the missing contributions from the Colts and Pacers:

Contributions from the city's pro sports teams is no longer part of the CIB bailout plan.

Initial plans for the bailout called for the Colts and Pacers to pay $5 million each to the Capital Improvement Board.

"Well, I think everyone felt strongly that was happening and it's no longer happening. What can I say?" said CIB President Bob Grand.

"I have no idea. I'm not privy to those discussions," said City-County Council member Joanne Sanders.

The Pacers, though, are losing money and the Colts have repeatedly said they already contribute through their 30-year lease.

"I think it's still looming out there," said State Senator Luke Kenley (R-Noblesville), who first suggested the contributions. "I don't know the right share of the teams and they've resisted in some ways, but I thought it was an important issue for the public to get an answer on."

Kenley says regardless of what happens at the statehouse, there's still a chance for the teams to contribute. But he also says that's an issue for Marion County to tackle.

"We continue to have conversations and remain optimistic about some level of participation," said Paul Okeson, Mayor Greg Ballard's Chief of Staff.

Still, Okeson says so far there's nothing on the table. The Colts, though, recently agreed to sponsor the high school football championships, with quarterback Peyton Manning becoming a spokesman for the Convention and Visitors Association.

"Anything like that is good," Kenley said.

This is just further confirmation of how little lawmakers care about the average taxpayer. They're all so enamored by the Colts and Pacers because of all of the free tickets and campaign contributions they get from the team's owners. They'll shove it up your ass without blinking an eye and then pretend they're doing you a favor. Throw all of the bums out, I say.