Local nonprofit organizations may very well see significant cuts to their budgets because of the $43 million deficit the Capitol Improvement Board (CIB) faces next year.
The CIB was established in 1965 by the Indiana General Assembly to manage the construction and operation of the Indiana Convention Center and the RCA Dome. The board currently manages Lucas Oil Stadium, Conseco Fieldhouse, Victory Field and the convention center.
Now however, 44 years later, the board is losing revenue, which will hurt key organizations in our community: Indiana Black Expo (IBE) and the Sports Corp. Both IBE and the Sports Corp. receive $150,000 from the CIB annually. In addition, the Arts Council of Indianapolis receives $1 million from the CIB and $2 million goes to cultural tourism efforts.
The primary source of the CIB’s financial woes can be attributed to the city’s new stadium. It will cost approximately $27.2 million to operate Lucas Oil Stadium this year, but the stadium is only expected to bring in $7.7 million of revenue, resulting in a whooping $19.5 million shortage.
Another blow to CIB’s budget was modifications to the Colts contract, which eliminated $8 million from the revenue that the board previously generated. The new changes include the Colts receiving all revenue generated from the suites and advertising as well as a larger percentage of sales at the stadium from food and novelty items. While the updated contract is obviously a great thing for the Colts, it seems as if the CIB would have played hardball with the suite and advertising revenue cut. Dividing the generated funds in half may have been a bit too unrealistic, but a 70/30 or even an 80/20 split may have been more feasible. CIB also pays the Colts $3.5 million a year for non-Colts events and activities held in the stadium. For the life of me, I don’t understand how the CIB fell for that, particularly because the board covers all of the marketing and event expenses for these non-Colts activities. However, with the Super Bowl win and all of Tony Dungy’s accomplishments, I suppose I understand how Colts owner Jim Irsay was able to negotiate with such prowess.
Although the CIB is facing challenges, its leaders showed just how proactive they are during Monday’s board meeting when they announced a $5.8 million budget cut that will hit in areas such as salaries, supplies, services, and repairs. This was a good move by Board President Robert Grand and the other members and it shows their willingness to resolve the situation. However, $5.8 million is only a drop in the $43 million deficit bucket.
There have been several possible solutions tossed around to reduce CIB’s debt: tax increases, higher ticket prices, and even a downtown casino. Of the aforementioned, the only one I think is most fair for all is to increase ticket prices. There was a lot of opposition from the community when the discussion of building a new stadium initially arose. Many people couldn’t understand how a new stadium could be more important than updating and constructing schools. The money being spent on preparations for Super Bowl XLVI in 2012 now baffles many of those same people.
Increasing ticket prices or implementing a user fee is the best thing to do — that way those avid sports fans can show their true allegiance by supporting the teams and the city during financial uncertainties. Doing this would be similar to the increase in cigarette taxes: if you opt to smoke, then you pay for that luxury.
A good friend of mine had a great idea. He suggested charging user fees at downtown restaurants on game nights. Consumers could then make the decision as to whether or not they want to dine at the restaurant on that particular night. Again, this would increase revenue for the CIB, but it would also make it fair to everyone — sports enthusiasts and those who are uninterested or unsupportive.
Despite the efforts being made to reduce the deficit, Grand, CIB’s president, said he “expects that CIB grants to nonprofit groups will suffer in a future round of cost-cutting.” Unfortunately, that includes IBE, the Sports Corp., the Arts Council of Indianapolis and cultural tourism. These organizations provide quality services to the community — when they suffer, the community ultimately suffers. The cuts to the nonprofit sector coupled with the fact that prior to the current dilemma, CIB had never experienced a decline in revenue leaves many with one question: Was building Lucas Oil Stadium the right thing to do?
Let me know what you think. Send your responses to Newsroom@indyrecorder.com.
