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Consequences and Repercussions?

Now that the Indianapolis City-County Council has passed the one-percent hotel tax increase,  I’m in the process of gauging the fallout from the bi-partisan 15-14 vote.   And I can report so far my political geiger counter is not picking up very much.

There’s been some chatter in the blogosphere, but there have been no calls to either the Mayor’s office nor the Council office from citizens complaining about the tax increase.

I also spoke to several City-County Councilors who voted both for and against the tax increase and reaction has been scant at best.   One councilor told me he got a handful of e-mails, but they were split 50-50.  One got four text messages thanking him for voting against the tax.   Another just got one complaint on their facebook page.  The most replies were nearly dozen and a half e-mails of support for a Councilor who voted no.

Councilors also told me they got more calls from constituents over the smoking ban, human rights ordinance,  and dangerous dog ordinance than they did the hotel tax increase.   And even in those instances, the Council chambers were packed with citizens.  With the hotel tax vote, the room was barely half full.

I bring this up because despite what the chatter class might say,  anyone who thinks the hotel tax is going to be a game changer in 2011 is probably in for a surprise.  The income tax increase of 2007 was a mandatory tax that was passed in an election year.  The hotel tax was a voluntary tax paid for by visitors and it occurred more than two years before the next municipal election.

Now, if there’s a bailout of the Indiana Pacers and the city takes over the operations of Conseco Fieldhouse for $15 million and gets nothing in return there will be blood in the streets and citizens shall bend their plowshares back into swords and rightly so.

But for now, the world moves on and maybe it’s time for the rest of us to do the same.

  • varangianguard

    Unless you're making some kind of joke, it's spelled repercussion.

  • patriotpaul

    Unlike the property tax debacle, the room was not filled with protesters with signs, albeit one frequent protester with straw hat. There was no citizen crowd bum-rush when the doors opened, and no protesters left standing outside in the heat, and the party in power did not stack the room in advance. In fact, there were no grass-roots rallies to generate and marshall any ire from citizens. However, it was essentially your everyday political bribe. Either authorize the hotel increase or forfeit the millions the State will loan you. The Council took the bait and now city taxpayers are on the hook to pay it back. I don't think this was a shining moment for either party.

  • Indiana_Barrister

    Thanks. I was typing too fast and doing a radio show.

  • pogden297

    Abdul, you're missing how easy it would be for a political strategist to use the tax increase in a campaign against Republicans, most of whom had pledged against raising taxes. It's a wonderful political issue and don't think the Democrats don't know it. That's why they didn't show up at the committee meeting to oppose it and why they were always going to give the Republicans enough votes to pass the thing. The assumption that the public is going to parse distinctions between different types of taxes in the midst of a political campaign is wishful thinking. To the public a tax is a tax is a tax. They aren't going to listen to explanations that one tax is okay and another is not.

    Regardless of whether it was the right thing to do, from a purely political standpoint, the Republicans in close districts who voted for the tax increase committed political suicide Monday night.

  • Indiana_Barrister

    Paul I totally disagree. You could make the same argument that Democrats who voted against lowering the COIT also voted for higher taxes. What will determine 2011 will be the mood of the electorate.

    And you keep going on about the GOP losing the Council, you keep forgetting the GOP gets to draw the map next year. And just like Pat Bauer can keep his majority even though more Rs vote statewide than Ds, I don't see any reason why Republicans locally can't do the same thing.

    Remember, unlike last time, you don't have a GOP council and a Democratic mayor, you have a Republican Council and a Republican Mayor.

  • Name

    Bastiat's broken window gets another workout. The world will, of course, move along but if there is competition for convention business the locker rooms of our competitors are already pasted with words to the effect that taking down the Highest Hotel Taxers in the Country ought not be too hard to accomplish. Great selling point.

  • Fact Checker

    The issue is not the hotel tax which most of us who live here will not pay or only pay a little. The issue is councillors who promised and pledged no tax increases and then voted to increase this tax. What tax will they increase next.

  • patriotpaul

    The mood of the electorate in the future election cycle is politically an eternity from now. At that time, the City will be in NFL superbowl euphoria and broken promises in order to make that happen could simply be viewed as one of those Hold your nose moments, if remembered at all. Kicking the can down the road when the citizens must anni-up to payback State loans with tax hikes could see an instant replay of a 2007 citizen revolt depending on how these tax hikes will be extracted from Marion County citizens. Alot could change with prospects of another regional tax. Abdul has a point. It is hard to speculate the mood of the electorate this early.

  • Dave

    The accumulative, numbing effect of voter disillusion, degrades into apathy; results that appear “unexpected” in the rear view mirror. No show voters are uninspired voters; who, however wittingly, can hand elections to a coherent & organized opposition. If a tax on visitors is such a good & innocuous idea, why not raise it to 15 or 20%? If increased revenue is the goal, lower taxes are better economics for that objective.

  • Matt Stone

    Abdul, it isn't just the hotel tax increase, but the $27 million borrowed from the state with no plan on how to pay it+interest back. In fact, the CIB will have even LESS revenue coming in in the future than they do now.

    As mentioned at the CIB meeting, the parking lot they run where MSA used to sit is being sold to a private contractor. And if the privatization of parking ever goes through, they could potentially lose even more of their revenue.

  • guest

    The point has been missed. This is only the beginning of at least 3 additional tax increases that will occur in the next 3 years. 2 have already occurred, recently. The property tax increase and now the hotel tax. The 3 taxes that will likely occur will be property and or state income tax increase, COIT, sin tax (again). On top of less funding for education (all levels), and public safety which will take a budget hit in 2011. Of course, D's and R's will be pointing fingers at each other but in the end, if your an incumbent, your to blame. And all the while, the Kernan-Shephard Report gathers dust.

  • http://www.hoosiersforfairtaxation.com/ melyssa

    Remember. Abdul deals the arms to both sides.

  • IndyAries

    “there will be blood in the streets and citizens shall bend their plowshares back into swords and rightly so.”

    Cute…this coming from a person who tells us NOT to be vociferous in our instructions to our representatives.

    Abdul, we raise our voices for various reasons…primarily because we are ANGRY about what government has done TO us, is doing TO us, and will be doing TO us.

    This is not how it's supposed to be, and you well know it. YES, we are pissed! Yes, we are LOUD. Yes, we are ANGRY.

    Riddle me this: Why are most of our elected congress-critters REFUSING to hold town hall meetings with THEIR constituents while they are on 'vacation'?

  • Nick

    Let's be real.

    Everyone with common sense knew they were going to take the money the legislature put together, it was just a matter of what they were going to do with the Pacers bailout request.

    Absent any real reform proposals, they have just bought some time, positioned the CIB for a state take over with unsustainable debt, and failed to address the underlining Colts contract which broke the CIB business model.

    Oh yeah, and the Pacer's minions are still running around looking for a taxpayer bailout.

  • http://www.hoosiersforfairtaxation.com/ melyssa

    MAYOR GREG BALLARD
    200 E Washington St # 2501
    Indianapolis, IN 46204-3333
    (317) 327-3200

    Gosh Abdul, I didn't think it did any good to complain AFTER the fact, but you inspired me to call the Mayor's office today. I betcha your readers fed up with the CIB ponzi scheme, and the Mayor's participation in perpetuating it, will also call Mayor Ballard today too!

    Good job on your arms dealing. Never crossed my mind to also contact them AFTER the fact.

  • Nick

    I think few people are paying attention to these “small” details which will shape the size of the next financial crisis at the CIB, and the size of the next taxpayer bailout request.

  • Dave

    We enjoy liberty & suffer slavery, in percentages. Isn't liberty, something other than the 40-60% of life or year, confiscated by tax? Guest brings to light the likely future discomfort of yanking & replacing the bandaid with additional taxing “solutions.” The Kernan-Shepard Report was destined to gather dust, it's qualitative inadequacies wouldn't drive decisions in a like revenue, private sector or fortune 500 enterprise.

  • pogden297

    No, to argue the vote against lowering the COIT is a tax increase is too complex to package as a campaign message. Raising taxes when you pledged not to, that's a big problem. People are also forgetting that it's not just the raising of the tax, but what people perceive the money is going to. The public see the tax increase as going into the pockets of the Simons and Irsay…that's very, very unpopular. The 2007 tax increase was allegedly for public safety and the Ds still got hammered for it. It will even be worse for the Rs. As far as the explanation that this is just a visitor tax residents won't pay, that's too long of an explanation. All the voters are going to hear is “tax increase” and they're going to stop listening after that.

    I would point out that as far as control of the council, regardless of how you redo the districts, the Rs start out in a 4 vote hole because of the at-large seats. It would be next to impossible to draw 25 districts in Marion County that would be 15-10 in favor of Republicans.

    Someone pretty high up in the GOP organization, and been involved in politics for decades, told me that the 2011 muni election will be the last election run under the old maps, and the first election with the new maps will be 2015. The census data won't be out until early 2011, too late to allow the redrawing of the maps before the 2011 primary. I suspect he might be wrong. I've seen the turnaround time on getting data and drawing the disticts at a month or so before.

  • wilson46201

    The last date to file to run in the Primary in 2011 will be around Feb.20 (or so). That'd require the finalized definitions and maps of the Councilmanic Districts be available sometime comfortably before that date. That'd require the Council (which draws the maps) receive the raw precinct-by-precinct data from the 2010 Census. That's cutting it very, very close. It's going to be a mess trying for new Council Districts in 2011.

  • pogden297

    Thanks, Wilson, I forgot about the filing date. That moves it up even earlier. I can't imagine they'll have the census data by 2/20 and have the maps redrawn by then.

  • pogden297

    PP, that is an excellent point. One thing that hurt the Ds in 2007 was the timing of the tax increase versus the election.

    I think though the Ds will remind the electorate of the tax increases in 2011 through targeted campaign advertisements. Plus, the way this bailout was set up, things have the potential to linger for years.

  • Nick

    Your wrong about Kernan Shepard.

    The political bureaucrats are afraid of the accountability, efficiency and transparency proposed by the bipartisan group who prepared it.

  • Dave

    Nick: That may be. However, the inclusion of a few capable, captains of private enterprise (people who fund the very public sector pensions of those who were included in the report), could've helped to focus beyond study, on actionable solutions linked to the limited purpose of government. The failure to include input from producers (the free market suppliers of publicly consumed capital & resources) is inherently & therefore qualitatively flawed. There's nothing objectionable about the name of the report, it's the quality that's at issue.

  • Nick

    The Kernan Shepard report is the result of a earlier private sector review of Indiana government by several Hoosier corporate titans.

    It was funded by the CEO's because bureaucrats tried to stop it by withdrawing legislative approved funding.

  • Nick

    The Kernan Shepard report is the result of a earlier private sector review of Indiana government by several Hoosier corporate titans.

    It was funded by the CEO's because bureaucrats tried to stop it by withdrawing legislative approved funding.

  • Think Again

    Wilson's council district responsn was very interesting. We should all revisit history: Abduk–this was before you arrived, and I've posted it here before, but:

    The then-Republican council drew districts and tried to work with the then-Republican Clerk, to make ballot placement and council districts a huge advantage for the GOP. They had smelled the political smoke, and it wasn't pretty for their side.

    Democrats promptly filed suit, and the case went to Superior Court Judge Cale Bradford. Whose brother was in the then-council GOP majority. No problemo, right? Surely Cale would recuse.

    Not so fast, true believers! He ruled with the Republicans. The Indiana Court of Appeals overruled him promptly, and admonished him for even taking the case. As a result, due to time constraints and other issues, a judicial panel drew the council maps.

    What did those maps produce? A close City Council two elections in a row, and party control shifted in 2003 and again in 2007. The judicial panel did a pretty good job, it can be argued.

    The moral to this story? There isn't sufficient gravitas in the current council majority caucus to draw stick figures, let alone council district maps. Who's going to head up that effort? Think about it.

    I'm for the judicial panel. It worked, quickly and without bloodshed.

    But please, please….don't file any lawsuits over it. Because the moral to this political sad story, is that you can evidently act improperly on the bench and get rewarded: Judge Bradford is now on the Court of Appeals. In Indiana, that is tantamount to a lifetime appointment.

  • Dave

    Nick: Do you recall the names of those titans / CEO'S? There are too many circumventive aspects of the KS Report (i.e. apparitional referenda, dynamic economic modeling, etc.); c'est le tigre de papier.

  • Taxpayer 834512

    As said already, not a shining moment for either party, and particularly for the taxpayers. I'm not happy with my counselor's (Ryan Vaughn) refusal to recuse himself from some votes. Nor, with the obvious need for a publicly aired contract for private management of our facilities, or at least a reorganization of the CIB with some non-parasitic, real citizen representation. It seems like our seemingly essential professional sports teams and Elmer Gantryesque board reps took game, set and match. Small consolation to look forward to voting for whomever will spend the least money.

  • seanshepard

    I think Abdul makes a reasonable point that few are really paying attention to the 1% tax increase and I would also concur with the wise soul who pointed out that another $27 million in debt is just as much a consideration.

    At the end of the day, some of us just don't like the idea of Indianapolis becoming more uncompetetive economically, especially when the need to do so is largely caused by subsidies for private enterprises like sports teams. I love the Colts and (historically – but only sometimes now) the Pacers but abhor how professional sports franchises jack the taxpayers around all over the country. Their business model is completely dependent on hijacking the machinery of government and it's ability to tax. THIS IS WRONG.

    If the true cost of a Colts game (guessing around $600 for a family of four – $60 to $90 a ticket just for the stadium subsidy??) had to be paid by the actual customers, they would have to rethink their business or their customer base would be quite diminished.

    And for Dave … local, state and federal government spending is now equal (2008) to about 65% of the private economy – so – I think as Melyssa posted somewhere … right about now is when we all get to start working for ourselves this year. ;-)

    And for TA … What were your thoughts on State Senator Mike Delph's proposal last session to have an independent board draw political boundaries? I know it died on the vine and would still leave room for political bias or cronyism, but it seemed a step in the right direction perhaps?

  • IndyAries

    Yesterday, 12 August, was Cost of Government Day.

  • John Howard

    Wow, not that long ago it was in July, June, May.

    What do you suppose happens when it finally reaches Dec 31st? I suspect it will be 'Obama gets elected to 2nd term.'

  • Think Again

    Sean, I read Delph's bill. It was a start. I try to kepe an open mind, but Delph's stuff usually leaves me cold. If I'm not mistaken, he did (or does?) work for Dan Burton as a senior aide. If that's wrong, I'm certain someone will correct me.

    And if he did/does, that's almost all I need to know.

    The judges did a good job with council district maps, and they did it promptly. The proof is the succeeding two elections.

  • Name

    It is outrageous that the Pacers claim that they have never made any money should go unchallenged.

    Releasing partial and unaudited financials to a few friendly insiders, who are forced to sign non disclosure agreements, is NOT enough to convince anyone with ANY brains to believe this fairy tale that the Simons are not making money on their Pacers entertainment enterprise.

    Public disclosure of audited financial statements from the Pacers and all other related entertainment companies along with legal affidavits from the team owners, accountants, auditors, and bankers would be a good start to legitimacy and creditability.

    Anything less should be disregarded as fantasy and possibly a crime.

  • Name

    It is outrageous that the Pacers claim that they have never made any money should go unchallenged.

    Releasing partial and unaudited financials to a few friendly insiders, who are forced to sign non disclosure agreements, is NOT enough to convince anyone with ANY brains to believe this fairy tale that the Simons are not making money on their Pacers entertainment enterprise.

    Public disclosure of audited financial statements from the Pacers and all other related entertainment companies along with legal affidavits from the team owners, accountants, auditors, and bankers would be a good start to legitimacy and creditability.

    Anything less should be disregarded as fantasy and possibly a crime.