SUBSIDY CITY WANTS WEALTHY ON PERMANENT DOLE
City and County politicians are trying to put Cuyahoga County residents in a box on the sin tax.
They are counting on voters to be gullible and a credulous news media to do the selling job, aided by a million dollar ad campaign.
However, I think they have finally outfoxed themselves by taxing themselves into a box - there are too many tax hikes for the public to swallow.
The sports tax is the biggest one.
On the May 6th ballot there will be tax levies, in addition, for schools or cities in Shaker Heights, Pepper Pike, Maple Heights, Seven Hills, Parma, Strongsville, Brooklyn, Olmsted Falls and Bedford Heights. Residents will be taxing themselves at home. It hurts.
In the near future there will be other tax hikes, including renewal of the cigarette tax for arts and culture, not to mention yet unknown tax needs.
But the big push will be to aid, without clear knowledge of neither how the money will be used on these sports facilities nor what other needs they'll require thereafter. It's a blank check deal.
I was on the Mansfield Frazier radio (WTAM 1100 Sundays) show twice recently with Cleveland Council President Kevin Kelley.
Kelly's argument reflects the false reasoning of the teams and the Greater Cleveland Partnership. (You may have noticed numerous TV ads running day and night. You will find once contributions have to be reported that the team owners and GCP member have contributed generously. In 1990 they spent some three-quarters of a million dollars on advertising, which one of its former leaders labeled as bogus.)
Kelley and the corporate establishment want you to believe that the city is boxed in by the lease. That if we don't vote the new $290 million tax increase (added to hundreds of millions already paid) that the city coffers will be depleted.
Defeat of Issue 7 on May 6 will only mean that we reject a 20-year new sin tax that will cost Cuyahoga County residents the $294 million.
What the proponents also don't mention is that taxes continue to be collected for the Browns stadium. They keep flowing.
The city imposed, without a vote of the electorate, a number of taxes to pay for the bonds of the Browns stadium. They have some 11 years to run.
Let me list them:
- An 8 percent parking tax in Cleveland worth some $7.1 million a year (though likely more since parking rates have risen since the mid 1990s when the tax was passed). It should produce $78 million for Browns stadium payments.
- A 2 percent increase in the admission tax, estimated at the time at $1.2 million a year. That should bring in another $13.2 million.
- A $2 fee for each car rental that should produce some $7.7 million.
Beyond that the city generously (and stupidly) committed for "comfort" of bondholders an additional $5.3 million a year for 29 years from admission tax revenues. That commits some $58 million in the duration left.
All together that's $98.9 million in expected taxes in the city plus a commitment of $58 million of extra admission taxes.
If $290 million is added by a yes vote, the public could be indebted with as much as $446 million if the extra admission tax revenue needed to be used.
The Plain Dealer, Crain's and TV never remember any of this. Journalistic amnesia.
This is an unacceptable price tag.
What will happen when the tax is defeated?
City and County officials and team owners Jimmy Haslam, Dan Gilbert and Larry Dolan will have to seek a more reasonable solution.
They will have to redo the leases.
Now, the politicians, owners and corporate leaders want to convince voters they have no other choices.
The teams cannot walk away from the sweet deals they already have.
The city cannot afford to add sweeteners to the deal.
So it's REAL time. Time to deal.