Posts Tagged Cleveland Cavaliers

Do Taxpayers of Cleveland & Cuyahoga Have to Always Carry the Cost of Institutions that Serve a Much Wider Area of Northeast Ohio?

May 6, 2010… I read in the New York Times Friday that plans are being formulated to redo Progressive Field. Who knew?

A Gateway official says, however, that there is no big redo coming. Further, at this point, both teams leasing sports facilities are responsible for capital improvements.

But don’t you know that it is coming: We need a new stadium! The Indians might leave town! What we’ve heard before we will hear again. It’s only a matter of time.

It does bring up the question of how Cleveland and Cuyahoga County can continue to afford to build and support major institutions that serve a larger geographic area. Not only sports but cultural.

It does seem past the time for thinking about how we preserve the many facilities, institutions and infrastructure assets of Cleveland. The city is rich in major sports and cultural institutions, relics of a wealthier era. How can they be preserved? Who will pay for them?

Most of the actual institutions servicing Northeastern Ohio residents physically are in Cleveland or Cuyahoga County. Does that mean only those residents enjoy those venues? Of course not.

Progressive Field, Quicken Arena, Browns Stadium, Playhouse Square’s stages (Allen, Ohio, State, Palace theaters), the Cleveland Art Museum, Severance Hall and the Cleveland Orchestra. Even the highly subsidized downtown assets of Cleveland. These are places that serve a wider area of northeast Ohio, not just Cleveland or Cuyahoga residents.

But the bill to pay for these important institutions seems to fall, at least the public portion, most heavily upon Cleveland and Cuyahoga taxpayers. Every day in almost every way. And, unfortunately, they are regressive sales taxes weighing heavily on lower and middle income people. None are progressive taxes. Thanks to people like Tim Hagan and Mike White, George Voinovich and George Forbes.

In the latest County Auditor reports we get an idea of the tax burden here:

- The Medical Mart/Convention Center – Cuyahoga taxpayers have contributed via the quarter percent sale tax hike – $94,379,438.38 since only January 2008. Cuyahoga residents will be paying this tax for 20 years.

- Browns Stadium – Cuyahoga taxpayers have contributed via various alcohol sales taxes – $64,609,806.86 since August 2005. The tax previously amounted to some $266 million to help pay for some of Gateway’s costs at the baseball and basketball facilities. The tax was levied for 15 years for Gateway and 10 more years for the football stadium, taking us to 2015. Hopefully, not to be renewed.

- The Arts & Culture tax – Cuyahoga taxpayers have been paying this tax on cigarettes – $60,724,894.40 – Cuyahoga has been paying this tax since February 2007. It’s a tax that I believe will be extended on and on.

That adds up to some $220 million in taxes (not counting the $266 million for Gateway) on Cuyahoga taxpayers with tens of millions more to be collected before these taxes run out.

These taxes will continue for many years.

Cleveland and Cuyahoga County are both losing population. That means there are fewer people paying these taxes.

We see the effect it has had on RTA. The transit system depends also on the shrinking sales tax, one percent of the 7.75 sales tax, highest of any county in Ohio. Fewer people mean less purchasing thus less sales tax revenue. Population losses and higher percentages of poor people suggest further erosion of sales tax revenue.

The burden of these seemingly small taxes is heavy. They go from taxes on almost all alcoholic drinks, cigarettes, to parking and other revenue, such as the city’s parking revenue.

The latest tax increase county taxpayers are enduring is the added sales tax of one-quarter percent that raises some $40 million a year for a convention center and medical mart. These facilities serve far more than the people of Cleveland or Cuyahoga County. Why should the burden be limited to only Cuyahoga taxpayers?

In addition, almost all of these publicly subsidized institutions pay no property taxes, leaving the costs of fire, police, school, roads and many other services funded by property taxes. Home and commercial property owners pay more in higher property taxes. And tax abatements – which essentially go to higher income housing – to new and renewed housing also eats into revenue sources

But why does Cleveland have to pay the entire public cost of the Cleveland Browns playing field? Why do Cuyahoga County taxpayers have to pay essentially the entire cost of the playgrounds of the Cleveland Cavaliers and Cleveland Indians?

Most of the residents can’t even afford to attend these high-priced events.

The local taxpayers can no longer afford the many publicly-dependent institutions that provide entertainment for a much wider – and much wealthier – audience than the people of Cleveland and Cuyahoga County.

This is a problem of the entire northeast Ohio area, its residents and its taxing structure. The financial burden then should be shared more widely.

We hear a lot of talk about regionalism. This could be a most rewarding form of regionalism.

Why do Cuyahoga County residents alone have to pay for the culture tax that provides funds for some of our major (orchestra, museum) cultural institutions and many smaller arts and culture institutions?

The time is coming – really it has passed – when all the institutions this once wealthy city enjoyed and afforded can be supported by a shrinking and far less wealthy population.

We’re running out of the resources to finance what we have. Too institutionally rich; too economically deprived.

Now is the time to let the people of Lake, Summit, Medina, Lorain, Geauga know that they need to share in the burden of the cost of Cleveland and the treasurer of Cleveland and Cuyahoga County that they enjoy. Of course, some of the same type institutions in outlying areas should share in the wider financing method, whatever that becomes.

It’s time to think about a more regional tax approach to service the wealth of institutions in our communities. It ought to start with capturing taxes on a progressive basis from the beginning.

It’s a matter of fairness. The tax burden must be widened to a larger pool. It should also go where the money is.

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Gund Grant to Cleveland Schools… Such an Irony

February 28, 2010… Think of the irony of it. The Gund Foundation is giving the Cleveland schools $2.5 million of dollars, according to a Page one story today in The Plain Dealer. Isn’t it ironic – or at amusing – or a dime on a dollar – that the Gund family took MANY millions FROM the city’s schools.

The Gunds were big property tax evaders.

Yes, it is a good move for the Gund Foundation to give $2.5 million with a promise of more. We should applaud for it. But let’s not get teary eyed.

It is so much as how the world works.

The rich get richer and they bequeath tax-free pennies from those they took.

The Gunds – George and Gordon – of course, once owned the Cleveland Cavaliers. Our sales (sin) taxes built the arena for them. They took us for plenty of dough.

They also benefited from an arena free of property taxes – millions of dollars each year. Most of it, ironically, from the schools. Cleveland schools that is. A peak at how millions are lost:

http://www.clevelandleader.com/node/11689

The Gunds bought the Cavs from Ted Stepien before the 1983-83 season for some $20 million. The brothers sold the team for $375 million in 2005. Nice profit. After, of course, we provided them with a new arena. And parking. And a couple of free loges. Nice deal if you can get it. And if you have the dough you can.

Ironically, David Abbott in the early 1990s was Cuyahoga County chief administrator. Gateway was launched in May 1990. Abbott, who left in 1993, was a Tim Hagan man. Tim, of course, promoted Gateway. He was chief lobbyist, along with Mike White, in obtaining a full tax exemption for the arena building. It will never pay property taxes.

Abbott today has his picture on the PD front page as Gund Foundation executive director ($300,000 a year). He has certainly become a favorite person of the Pee Dee, where (maybe another irony) he once was a reporter.

And not to be paranoid or anything, Abbott also was an original board member of the Gateway Economic Development Corp. Gateway was very, very good to the Gunds. Gateway board members sort of ignored big overruns on the Gund arena. No good deed goes unrewarded in this game.

Abbott is a past director of University Circle, Inc. UCI is pressing hard for the Opportunity Corridor $375-million road to UC. Of course, the Gund Foundation gave the road project pushers $100,000 to start.

Money goes round and round. Some sometimes trickles down to where it is needed.

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