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January 23, 2019

My Doughnut's Got A Hole In It
A story in the February 6, 2010 edition of The Indianapolis Star reports that the doughnut counties surrounding Indianapolis have a new study that shows they are not receiving near the benefits that the city claims they are.

The study came on the heels of a separate study issued by the one-man Indiana Fiscal Policy Institute in mid-January of this year that bolstered assertions by "leaders" in Indianapolis that Marion County prosperity extends far beyond their governmental boundaries. In other words, surrounding counties should be grateful that they are located nearby.

Of course, that kind of talk helps Indianapolis officials and the governor justify the 1 percent food and beverage tax adopted in 2005 by the doughnut counties and paves the way for even more future contributions.

For the record, according to the cash-strapped Indianapolis Capital Improvement Board, here's how much has been contributed from the food and beverage tax so far by the six surrounding counties to help pay for Lucas Oil Stadium, other sports venues, and the Indianapolis Convention Center (in millions): Hamilton ($8.2), Hendricks ($4.6), Johnson ($4.5), Hancock ($1.4), Boone ($1.2) and Shelby ($1.0).

If you're interested, the story from the Star follows:

Indy's Neighbors Balk At More Taxes

In report, counties say city venues don't bring big benefits

The six counties that ring Indianapolis want to make one thing clear: When it comes to supporting the city's sports venues and convention center, they've already paid their fair share.

And maybe then some.

Armed with a new study, the counties contend they are not receiving nearly as much benefit from the city venues -- at least in terms of hotel business -- as Marion County officials suggest.

It's also pretty clear that the study is a pre-emptive strike intended to put Indianapolis lawmakers on notice that just in case they were thinking about trying to pass along any more of the costs to the doughnut counties, they should expect a fight.

"This is awkward for us," said Brenda Myers, executive director of the Hamilton County Convention and Visitors Bureau. "We don't want to pick a fight. We're trying to prevent a fight from occurring."

Not surprisingly, the report's conclusion drew a swift rebuttal from Marion County officials, some of whom say there's a case to be made that Indianapolis' neighbors should pay more.

They contend it also highlights one of the challenges some say has been an ongoing struggle for the counties: to view themselves as a region and cooperate like one.

"The question isn't who should pay more for what, but do we recognize that we are a growing metropolitan area with a regionalized economy?" said Paul Okeson, former chief of staff for Mayor Greg Ballard who now sits on the Capital Improvement Board.

The financial woes of the CIB, which manages the city's stadiums and the Indiana Convention Center, are well documented -- and so is the desire for Indianapolis officials to find new or expanded sources of money for the CIB.

In 2005, the doughnut counties agreed to create a 1 percent food and beverage tax. The counties keep a portion of the revenue, but part of it is targeted to pay down the debt on Indianapolis sports venues and the convention center. Through 2009, the counties had contributed $21 million.

Marion County officials have not formally proposed that the surrounding counties pay more, but they are exploring the notion. Last fall, members of the City-County Council formed a task force to look at ways to create a more regional approach to funding the CIB, which as of September faced a $15.9 million deficit after budget cuts and state assistance.

Leaders in the counties don't deny they benefit from Downtown amenities, but they argue that the benefit is overstated.

Convention and events traffic overflowed to doughnut county hotels on nine nights from October 2008 through September 2009, according to data the Hamilton County Convention and Visitors Bureau provided from a Smith Travel Research report that studied peak convention nights in Downtown Indianapolis.

Surrounding counties used to benefit much more two decades ago, said Myers, who is the doughnut counties' lone representative on the nine-member CIB. But Indianapolis' hotel room inventory has more than doubled since then, she said, which means fewer travelers are diverted to other counties.

Some members of the City-County Council task force, as well as tourism boosters in Indianapolis, say the doughnut counties' measurement of economic impact fails to take in the whole picture.

"This is more complex than just hotels," said Jackie Nytes, a City-County member who was instrumental in creating the task force. "The interdependence of these areas is far greater than people are willing to acknowledge."

Downtown venues provide people in surrounding counties with events and entertainment, and data show a large percentage take advantage of what the city has to offer. In 2008, the Indiana Pacers, who operate Conseco Fieldhouse, tracked that 23 percent of patrons at their events were from the surrounding counties, while 39 percent were from Marion County.

The doughnut counties counter that the ticket tax their residents pay for those events benefits the CIB.

But those in Marion County say the convention and leisure business also provides jobs for residents in outlying counties, as well as sales tax revenue that benefits the rest of the state, said James Wallis, senior vice president of finance, administration and technology for the Indianapolis Convention and Visitors Association.

His group estimated that $40 million in sales tax revenue was generated in Indianapolis last year from out-of-state visitors through conventions and leisure travel. The lion's share of that goes toward the state's general fund.

But beyond those arguments, some say, is the bigger picture: Without Indianapolis, the suburbs would fail to thrive. And some argue venues operated by the CIB are key to Indianapolis' success.

"A rising tide raises all boats," Okeson said. "A healthy CIB creates greater prosperity for our community by which surrounding communities can share wealth as well."

The doughnut counties agree it's a regional issue, but they don't think that means they should be used as a bailout source for problems they didn't create, said Emory Lencke, executive director of the Hendricks County Convention and Visitors Bureau.

"We'll pay for it by helping them fill it," Lencke said of the stadiums and convention space. "I don't want our visitors to pay for it unless they're using it."

After all, the CIB isn't the only agency hurting for money.

"We have funding shortfalls as well," said John Price, a Johnson County commissioner. "I think we have to be concerned first and foremost with the citizens in our county before we would send any (tax money) out."

So far, the task force has not put forward any specific plans for increasing regional participation. Among the ideas that could be considered, Nytes said, are increasing the counties' food and beverage tax or creating a regional sales tax.

She and others also are hoping that a stronger economy, more convention space and a new leisure tourism marketing push will help create non-tax revenue that will benefit the CIB.

By Carrie Ritchie and Francesca Jarosz - Content Copyright 2010 - Indianapolis Star

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