Posts Tagged tax subsidies
Do Taxpayers of Cleveland & Cuyahoga Have to Always Carry the Cost of Institutions that Serve a Much Wider Area of Northeast Ohio?
Posted by Roldo Bartimole in Economic Development, Politicians on May 6th, 2010
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.
County Santa (Tim Hagan) Very Good to MMPI in 2009
Posted by Roldo Bartimole in Economic Development, Politicians on December 24th, 2009
December 24, 2009… Santa Claus came often and generously to MMPI this year. It’s not a one-night trip in this case. Eight times – from May to December – he (played by Tim Hagan) dropped $333,333.33 checks into the Chicago firm bank account.
No need to send receipts. It’s a standing fee negotiated by that sharp negotiator Fred Nance of Squire, Sanders & Dempsey. He’s a sweetheart.
The $333,333.33 monthly checks add up to $2,666,666.64 for eight months in 2009.
What do we see that’s changed for our money? Any building by MMPI? No. Any digging by MMPI? No. Any acquiring of land for digging and building by MMPI? No.
But thanks for the $333,333.33 monthly allowances, says MMPI.
Actually, they don’t say thanks. They just send a brief money-due notice.
In addition to the monthly fee checks, another $1,240,799 was paid to MMPI for other tasks by the company or its contractors.
We can be happy though that, as the Plain Dealer reported this morning, negotiations for land at St. Clair and Ontario to acquire property where a medical mart can be built are not dead.
At the last public report, MMPI official Mark Falanga nixed attempts to purchase these properties as too expensive. Instead he wanted to build, apparently with no purchase cost, Mall C, city property. Then build his medical mart overlooking Lake Erie. On land reserved since the early 1900s for public purposes.
Using Mall C for a private business would have been crass, if not illegal.
We Cuyahoga County taxpayers have further enriched the Medical Mart/Convention Center fund, via the quarter percent increase in the sales tax, by another $3,084,125.90 in November. You will remember that the County Commissioners voted to increase the tax without any input or vote of citizens.
That puts the tab for taxpayers and the pool of money awaiting MMPI at $77,539,111.60. With a likely $3 million plus in December, the fund will be slightly more than $80 million for the first two years of the extra sales tax.
Just think, only 38 more years to go for this downtown trinket.
What $80 million in receipts in these two tough economic years tells me, however, is that the tax will bring in much more than $800 million over its lifetime. As the economy picks up and inflation adds to the price of what we buy, the sales tax will bring in more and more money to be used for the project.
(Meanwhile, the taxes for the Browns Stadium with November collections hit $59,583,958.34. Holiday greetings to Randy Lerner, too.)
Happy holidays to all you taxpayers – from me and MMPI and Randy.