Tuesday, February 12, 2013

Tax Relief for IMS (Done Properly) Makes Sense

I may get lambasted for this one by some of my "no more tax money to billionaires" friends on this one, but I believe that, if done right, a little tax help for one of our state's icons is more than appropriate.

The Indianapolis Motor Speedway has sat by quietly as the Indiana Pacers, the Indianapolis Colts, and other local sporting entities have gotten millions of dollars in taxpayer money.  They have been checks going out with little coming back in.

Long before the Indiana Pacers and the Indianapolis Colts existed as franchises and long before the NBA and NFL organized, the Indianapolis Motor Speedway was bringing people to our city and our state for motor sports events and the motor sports industry.  IMS owners, the Hulman-George Family, have spent an astronomical amount of their own money to upgrade their facility while asking for nothing and bringing in an unbelievable amount of money and prestige to Indianapolis and to Indiana.

Why then, as a taxpayer, does it not make sense to give a little back to them?  The bill, as written by Senator Mike Young, calls for IMS to receive $5 million a year in locally-generated (in a "motor sports investment district" encompassing the speedway) tax money over 20 years as a tax credit to make improvements to the facility.  As you may remember, costly improvements are required to make the IMS facility more disabled-accessible.  You can read about the proposal here.  It actually sounds pretty reasonable for a Mike Young bill.

Is IMS worthy of receiving taxpayer money?  Certainly it's much more worthy than an over $35 million handout to the Pacers.  The Pacers unfortunately can't draw flies right now even though they are putting a great product on the floor.  That's not the case at IMS.  The track routinely packs in 250,000 race fans on Indy 500 race day with even more in the infield, and while the Brickyard 400 NASCAR race has lost some of its former luster, that's still another near 100,000 race fans packing the stands.

When I first heard this proposed bill, I was strongly against it.  After reading up on the plan, to me, it sounds like a solid plan and a different plan than the one the local government handed the Pacers.  This is less of a hand out and more of a hand up for a longtime friend like the Indianapolis Motor Speedway.


HoosierNick said...

Gotta disagree with you on this one, Jon. Even though I am a gearhead and would actually like to see the Speedway get the money, the real question to be answered is "Where do we draw the line"? Once the community coffers were opened to Messrs Irsay and Simon, it was only a matter of time before the Hulman-Georges came looking for a piece of the same pie. The big difference is that the Speedway can't take their ball and go somewhere else if we fail to ante up. Sure, they kick in a pot load to the local economy, but that alone doesn't justify the expenditure. I'd like to hear the Town of Speedway's take on this give away before any checks get signed. How are other tracks coping with handicapped access? Have they needed a hand from their local governments to comply with the law? How did Kentucky handle the need for increased traffic flow after the first NASCAR race fiasco at KMS? I say let IMS make their own case for the extra money that involves more than just "me too"!


Paul K. Ogden said...

I'm with HoosierNick. I'm pretty sure IMS is making money. They don't need our help to make yet more money via our subsidization of their business.

NWIN Hoosier said...

I'm a huge Indycar fan and near lifelong Hoosier, but the numbers on this make no sense to me. The weighted average ticket price for the 500 and Brickyard is $85 (based on Curt Cavin's figures for seating in every section, multiplied by the 2013 price for such tickets). Attendance at the 500 can't grow all that much, so the major increase in revenues at IMS would be from regaining lost fans back to the Brickyard. At $85 per ticket, plus $50 per head for concessions, if an additional 100k show up for the Brickyard, the incremental gross income to IMS is only $13.5 million per year. I don't see how that can generate $5 million in incremental taxes out of the facility. And IMS is flat out lying in its press release that the plan wouldn't impact school funding because it's not tied to property tax...school operating funds were removed from property tax levies in 2008 and transferred to the state general fund, into which sales and income taxes flow. IMS is now charging less per average ticket for the 500 than the Colts get for each and every home game per several sites that track NFL ticket pricing. Why doesn't "The Greatest Spectacle in Racing" charge more? Low demand, or bad product? In either case, it's not up to the Indiana taxpayer to fix the problem.