The wrong booze tax

WE SAY Alcohol tax increase for sporting teams is affordable, but unnecessary.

The Senate Appropriations Committee voted 10-2 for a plan to double Indiana’s tax on alcohol last Thursday. 

While critics emphasize that this tax hike will double the current alcohol tax, we’d like to point out that this doubling would mean paying only one cent more for a 12-ounce beer and a dime extra for a bottle of wine. 

The tax increase is reasonable. Anyone who can afford alcoholic beverages now should still be able to July 1, when the tax increase would take effect.

The plan’s architect, Republican Sen. Luke Kenley, said he hoped the estimated $40 million in extra tax revenue would be dispersed throughout the state to troubled municipalities for use in economic development projects.

The larger the city, the larger its cut.

But Indianapolis will give its chunk – about $8 million – to the Capital Improvement Board, a private firm that operates central Indiana’s professional stadiums. 

According to the Indianapolis Star, “The CIB expects to be $47 million dollars short in its operation of Lucas Oil Stadium, Conseco Fieldhouse, Victory Field and the Indiana Convention Center.”

Obviously, Indianapolis’ share of the revenue wouldn’t fill the entire budget gap. So to fill the rest, Kenley proposes CIB cuts, increased ticket taxes on stadium events, higher hotel taxes and taking money from the Colts and Pacers – Indy’s professional football and basketball team.

Most cities and towns, which are frequently cash-strapped, could use this money for genuine economic development. However, Indianapolis’ use of their fairly large chunk of the pie does not warrant the alcohol tax increase even if the proposals are affordable. 

Kenley tried to justify the plan by telling the Indianapolis Star, “I don’t know how else we’re going to do it. You can’t levy a big tax against anybody in an economy like this. You’ve just got to get everybody to take a little bite and live with it.” 

A stadium event is not a public good. So why should taxpayers be funding any portion of it?

Yes, the events do attract people from out of town to spend elsewhere in the city. Maybe attendees, then, shouldn’t be the only ones to pay for the stadiums’ operating costs.

But the outside spending these people bring is limited to Indianapolis.

Considering towns such as Bloomington, Muncie, West Lafayette and South Bend probably consume more alcohol per capita, it’s a shame we could be drinking for Indianapolis’ sports.

In a recession, it’s disappointing that bailing out athletics teams is among the first of our state government’s priorities.