Cool Cleveland ENDORSEMENT: Vote NO on Issue 7 — The Sin Tax for Sports Facilities

Tue 5/6

After looking at the arguments made in favor of renewing the so-called “sin” tax on cigarettes and alcohol in Cuyahoga County to pay for enhancements to Cleveland’s three sports facilities, we’ve come to the conclusion that voting “no” on May 6 is the way to go.

The tax was first passed in 1990 to pay for Gateway construction — what is now called Progressive Field and Quicken Loans Arena. It was extended in 1996 to pay for the construction of the Browns Stadium. We were promised it would expire and it is set to do so in July 2015 — NOT this summer.

In the past few weeks, we’ve talked about the outlines of the Issue 7 campaign to renew the tax, which calls itself “Keep Cleveland Strong.” And we’ve talked about the value of sports franchises in enhancing the economic well-being of an area, a key claim being made by the campaign to renew the tax.

We’ve found that, for the most part, there is little. The jobs and economic spinoff teams create is minimal, despite attempts by promoters of renewal to give them credit for all growth and development downtown in the last few years. And despite what the pro-sin tax campaign says, it’s hard to see how any jobs would be gained if it passes, given that the number of games played stays the same.

When the campaign isn’t making these shaky claims, it’s inciting financial panic: we have “obligations,” and if we don’t meet them, the money will come from the general fund, forcing the lay off police, fire fighters etc.

But one of the most confusing things about the sin tax renewal is the numbers. What do the leases obligate us to pay for? What have we paid for in the past? What are we being asked to pay for now? How much of what this tax extension would raise goes to obligations and how much is simply for the teams’ wish lists? How much money is coming in from other sources earmarked for the sports facilities? Are there other obligations, including construction debt, which might not even be covered by the renewal?

The ballot language says renewal is “For the purpose of paying the costs of constructing, renovating, improving, or repairing sports facilities and reimbursing a county for costs incurred by the county in the construction of sports facilities.”  That’s all voters are told about where this new money goes.

That raises more questions than it answers. It suggests that the original planning for the facilities didn’t take into account what construction would cost and now want to stick county taxpayers with the bill for their poor planning. And what constitutes “renovation,” what constitutes “repair,” and what falls under “improving”? There are dozens of ways to “improve” the facilities that aren’t required by the leases and would primarily improve the team owners’ bottom line. Where’s the breakdown on how the money would be used?

When the sin tax was extended for the construction of Browns Stadium, other taxes were added to pay for it as well, including a parking tax, a rental car tax, and most notoriously, an increased admissions tax on ALL Cleveland entertainment venues except nonprofits like the Cleveland Orchestra and PlayhouseSquare. So small, locally owned venues like the Happy Dog and the Beachland Ballroom, with their razor-thin margins and a business model that gives all or most of admissions to the bands, were paying for a billionaire’s playhouse. Also, a piece of the bed tax was directed toward the stadium. Would those combined revenues be enough to cover lease obligations?

The renewal campaign hasn’t been about addressing these hard dollars-and-cents issues. It’s been about inflated claims and scare tactics.

One of the scare tactics is saying that if we don’t vote for this, the lease terms will force us to take money from the general fund. Those terms and the amount they cover hasn’t been spelled out and again, we don’t know what money is coming in from other sources. Technically, all money raised for the sports facilities goes into the general fund — and then comes out again, spent on behalf of the teams (why the “team owners don’t get the money” argue is so specious. Of course we don’t hand them a check — we just buy them what they need).

The pro-sin tax campaign’s instantaneous and over-the-top attack on the “FairShare” proposal made by the grassroots anti-sin tax coalition — to raise the money via a $3.25 facility fee on each sports event ticket instead of a sin tax — and refusal to consider it at all is interesting because it’s so out of proportion to a reasonable proposal made by a group with much less money, media, and power than the renewal campaign. They resorted to falsehoods, exaggerations, and ad hominem attacks. Why?

This lack of information alone is reason to vote against Issue 7, even if you’re OK with filling the pockets of billionaires with tax dollars because you value sports that much or you buy into the claims of wider economic benefits.  But as the anti-sin tax group has repeatedly said, if this fails in May, NOTHING HAPPENS. No jobs are lost, no teams leave, no obligations go unfulfilled. It doesn’t expire until July 2015.

What defeat DOES do is crack the door open for something that has been lacking in this campaign: a true democratic process and a public discussion about what needs to be funded and the best way to do that. That’s reason enough to vote NO on the May 6 primary ballot — so we can have that discussion.

 

 

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