Uh, cover their asses in anticipation of the problems they are now neck-deep in?

INDIANAPOLIS – The headline in the May 4, 2005, edition of Howey Politics read: “Mitch’s Triumph: The Devil’s in the Details.”

Now, four years later – with the Indianapolis Capital Improvement Board facing a $47 million deficit – the Devil is back at the Indiana Statehouse where a bailout of the CIB is underway. The remedy, as brought to you by Senate Appropriations Chairman Luke Kenley with another on the way from Indianapolis Mayor Greg Ballard today, is a statewide tax hike on beer, wine and liquor (which have been unchanged since 1981), increases in Indianapolis hotel, food and beverage taxes (again), and a higher tax on tickets to CIB stadiums.

There is considerable doubt that the Kenley plan will pass in its current form when it’s heard on second reading next Monday. This potential implosion sets the stage for an Indianapolis casino, or at the very least a short-term bailout by legislators. Taxpayers are already numbed by the stunning array of government rescues from Wall Street to Detroit. Statehouse sources tell HPI that their focus has been on the biennial budget and the Unemployment Trust Fund, though Gov. Daniels is monitoring the Senate discussion and wants to be helpful.

That this mess – amid the deepest national recession and bailout mania – is one where the seeds were planted four years ago.

In the April 28, 2005, edition of Howey Politics, CIB President Fred Glass – now athletic director at Indiana University – said he was “worried” about the CIB “going bankrupt.”

“It’s all in the hands of the legislature,” Glass said. He had taken exception to a Goldman Sachs report that surfaced at the 11th hour with Sen. Kenley and then House Speaker Brian Bosma. Based on that report, Kenley, Bosma, then-OMB Director Chuck Schalliol, and Gov. Daniels’ chief of staff, Harry Gonso, concluded that Indianapolis Mayor Bart Peterson had inflated the annual tax intake needed to fund what would become Lucas Oil Stadium. Peterson and Glass had used $70 million that UBS had recommended; Goldman Sachs recommended $54 million. Kenley recalled the numbers ranging from $72 million to $45 million in the final stages of the negotiations.

On April 17, 2005 Glass and Peterson concluded that they would never get their stadium legislation through due to Gov. Daniels’ power play “out of the blue.” Daniels had decided in early April that none of the existing plans would pass and reluctantly got into the game. With the GOP controlling both Houses, the Peterson administration didn’t have the votes. The state would take over the stadium as Peterson painfully ceded control, hoping that he would at least get his IndyWorks program through. “Try as I might on that, responsibility had to follow authority, whether it was with the city or state,” Glass told Howey Politics. “So what I concluded is the state would never agree to anything and the project would die. They needed to have it all. That was my personal conclusion.”

On April 22, 2005 – a week before sine die – Peterson said, “As customary with projects of this type and Bond Bank financing, the CIB would receive the newly authorized revenues and use those revenues with existing CIB resources, to pay all debt service to meet the agreed project budget and pay operations and maintenance for the project.” Senior administration sources tell HPI that while the governor became engaged on the stadium issue in early April, that was the first time the operating expenses were mentioned. Daniels had seen the other plans flag and he was more interested in the Indiana Convention Center expansion.

Glass had said the same thing in the April 27, 2005, edition of the Indianapolis Star. However, an April 4 Star story by Matt Tully noted that Peterson had “seemed to frustrate some members” of the Senate Tax and Fiscal Policy Committee when the mayor agreed “the project could be financed at $53.3 million a year – about $15 million less than he initially asked for.”

Daniels and Bill Oesterle, who headed up the administration’s stadium effort, were honked by Glass’ “bankrupt” comments. “There was almost a $20 million a year difference,” Oesterle told Howey Politics. “The governor didn’t talk about the stadium until five plans had been aired. He didn’t get involved until it was clear it wouldn’t go anywhere.”

On April 30 – after sine die – Daniels said at a press conference: “Why did they (CIB and Peterson) ask for hundreds of millions more than it turns out was really necessary? What were they planning to do with that money? I didn’t know. We only discovered in the last week or two they were planning to borrow the money for operation and maintenance. That didn’t happen at Conseco. It didn’t happen at the (Hoosier/RCA) Dome. It didn’t happen … ever. That’s like having your mortgage covering your grocery money or your car loan to cover your gas and oil.”

The problem with that statement is that the Hoosier Dome – which was completed in 1983 – did have maintenance and operating costs funded. The Colts wouldn’t arrive until 1984.

Kenley told HPI on Wednesday that he remembered a very intense 72 to 96 hours prior to sine die. “When we got engaged, the state was being asked to put money in,” Kenley said. “We took control. State was being asked to pay a substantial amount from doughnut counties. I remember saying, ‘Look, we’ll help you do the capital project and everything else will be outside of that.’”

Kenley remembers telling Glass on the operating funds, “State legislators would have a fit for contributing state dollars for a Marion County facility.” Kenley said that it was during the 11th hour that Glass pressed for the operating funds. “We were stunned by that statement,” Kenley said. “There was never any discussion on operating funds.”

Kenley said he asked Glass how much it would cost to maintain and operate the facility. He said Glass told him, “We don’t know. Could be $6 million. $10 million. We won’t know until we get it up and running.” Lucas Oil Stadium would have more than double the number of restrooms and concession stands, more escalators, more space to heat and cool. Within three months, Glass and the CIB would sign on to the financing.

More than ever, this is the time for Libertarians to be active and involved in their communities for the people will notice. I have been a Libertarian for fourteen years now and have seen the LP grow and become more professional and focused. Tomorrow is a very important day here across the USA and this is an excellent opportunity to build relationships and I hope you are there with thousands others as we celebrate the vision our founding fathers have given us.