Monday, April 20, 2009

Setting Goals and Limits

Every time we turn around in the mess that is the Capital Improvement Board's finances, we have to hear about 66,000 hospitality jobs on the line. Now, I would like to think that the personalities hiding behind the maids and the cocktail servers and the janitors and the ticket takers really worry about the quality and quantity of those particular jobs. But, I'd like to see some salary breakdown. How much aggregate money goes to these 66,000 hospitality workers and how much aggregate money goes to the ball players and ball club owners? Which number would be larger? Who gets health insurance, dental benefits? Who doesn't need a second job to make ends meet?

But, even if there wasn't this duality, should we not ask - at what price do we continue to throw more and more taxpayer money at an industry that does not ever seem able to stand on its own two feet?

I would suggest that we pull together a group to study the downtown hospitality/entertainment / tourist industry. That would include hotels, restaurants, theaters, art galleries, malls, stadiums, and maybe even cross the river and pick up the zoo and gardens. The study group should not have ANY lobbyists on it. It should, however, have regular taxpayers, elected officials, and some folks with particular expertise, like accountants. There should be far more representatives of the funders than representatives of those who want the funds, so that preordained outcomes are avoided.

The purpose of the group would be to ask and answer these questions:

How much taxpayer money has been spent with what results?
How much more money does the taxpayer owe currently?

What is the goal of funding the downtown tourist/hospitality industry?
Is it to provide sports teams to a small market City?
Is it to provide a living wage to lots of people?
Should it be the City's goal?

How do we measure success in the goals?
Can this industry stand on its own and thrive?
If so, how do we reach that goal?
If not, is this the best return on investment industry to target with a forever stream of tax revenues?

What is the structure through which tax money is funneled presently?
Is this the optimum structure to reach the goals?
What is the optimum structure to reach the goals?

Which segments of this industry would produce the best overall results with any funds provided - sports, arts, entertainment?
What mix of funds vs. segment would provide the optimal strategy for meeting the goals?

I'm sure there are other questions and answers that could be derived.

All of this information would be given to the public for input on what they are willing to pay for a thriving downtown. Ample time would be given for comments - not just 2 minutes per person so officials don't have to be up late listening to their constituents.

The haphazard method used for 30 years now does not seem to be doing any more than wrecking havoc on the taxpayers' pocketbooks. The public deserves clear goals, strategies, and standards by which success can be measured. I'd say the public deserves all that BEFORE one more penny of tax money is funneled to the CIB.


Paul K. Ogden said...


There have been numerous academic studies on this subject and almost all point to the investment on professional sports franchises as being a bad investment. I quoted a couple of those on my blog awhile back, one from 2004, one from 2008. I have linked to the actual studies. Read them. They go into great detail about the results of their studies.

That 66,000 hospitality worker comment is such a joke. First it includes all such workers in the central Indiana area, not just the ones downtown. Second, it assumes that professionals sports are needed for those jobs to exist.

But the biggest problem is that professional sports usually involve someone from central Indiana attending the game and spending their money, say $80 a game. That's $80 not spent by that person on some other entertainment venture, such as taking the family out for dinner, a movie, etc. There would have to be cooks, busboys, waitresses, ticket takers, etc. employed to service that money spent elsewhere.

Again, there is no net gain, and some studies say there is a net loss of jobs with regard to spending public money on professional sports.


P.S. I dare say though the people pushing this couldn't care less about academic studies showing them wrong.

Had Enough Indy? said...

I look forward to reading the studies. Thank you for making me aware of them.

I think we have to expand the data driven approach that some of the City's departments are using, to the rest of them. We should not utilize hunches and anecdotes and expect good results. We should also not make arrangements behind closed doors and expect the public to embrace them.

I suspect the real goal of some is to finance professional sports teams in a small market City. They will point to as many crumbs falling off the table as they can to divert attention from the table. We need to decide point blank - is being a 'professional sports capital' the goal of the Citizens of Indianapolis and is it a worthy goal that can be maintained with so many other critical needs facing us.

I think a study group can pull all the threads together and debunk the myths. It can also look at whether a thriving downtown is worth public money. If so, how do we approach that goal? It is, after all, a different goal than being a professional sports City.

Thanks for your comments and perspective. I'm glad you are engaged in this, and other, issues.

Downtown Indy said...

Any 'jobs' figure needs to be documented as to whether the job exists only on a given Sunday or weekend, too. A spike in jobs 20 days a year is hardly something to crow about. Those are people who have other fulltime jobs (or several parttime jobs) anyway, and pickup some extra cash. These are not 'added' jobs by any stretch of the truth.

Anonymous said...

The study-group idea is a good one. We definitely need more public scrutiny and more reliable data on this issue.

Jon said...

Jobs and statistics attributed to arenas and stadiums are grossly over estimated and usually created by an entity that stands to gain $$$ if we build a new arena or stadium. When the interested party states that the city will reap millions of dollars, jobs etc. if we build it what economic studies are provided, what long term cost analysis is provided, what evidence if any is provided?

Back in 2001 Jim Irsay commissioned two studies for a new stadium "" Footnote to Mr. Irsay, I thought you said you never asked for a new stadium? By the way, if I remember correctly we weren't apprised of the results of those particular studies.

Often the lost opportunity cost of the new stadium has an adverse effect on the local economy, the displacement of tax dollars to the owners rather than investing in the community and it's people. Paul is correct in that most of revenue is just displaced spending rather than 'new' spending, net result zero actual revenue growth.

Whether the sports magnates and the fans like it or not there are no independent studies (zip, , zilch, none)that show any economic benefits for building arenas or stadiums.