INDIANAPOLIS – The potential plan to raise some taxes to help the Capital Improvement Board is drawing fire from those who say it will hurt their business.
Mayor Greg Ballard told Fox59 he’s considering a proposal to increase taxes on event admissions and car rentals.
Under the plan, the admissions tax would go from six percent to ten percent. The total car rental tax would increase from 15 percent to 17 percent. The city estimates the increases could raise nearly $7 million for the CIB budget. The Capital Improvement Board is in better financial shape than it was a couple years ago—but it’s still struggling.
“I think 15 is high enough,” said Charlie Mullen, co-owner and vice president of ACE Rent a Car. “I think two percent more pushes us over almost what they call a fiscal cliff.”
Others who work in the hospitality industry told Fox59 that charging more to rent cars could keep some travelers away from Indianapolis.
Mullen believes the CIB budget should be shored up by its own customers—namely ticket buyers.
“The customers pay all the bills, so maybe the customers should pay for this,” Mullen said. “The customers of the Pacers or the Colts or what have you. Not the car renting customers, not the car renting public.”
Mayor Ballard told Fox59 the city may have no choice.
“People need to remember all this was built up based on larger visitor taxes and user fee taxes because it has to get paid for some way,” Ballard said.
This wouldn’t be the first time these two taxes have been raised. Each went up as part of the 2005 plan to support the construction of Lucas Oil Stadium.
If the plan goes through, the car rental tax would have gone from 13 percent in 2005 to 17 percent in 2013. The admission tax would have doubled from five percent in 2005 to ten percent in 2013.
There is no official proposal on the table. Still, the discussion is sure to get lively in the early part of 2013, when tax increases become legally available to the city.
Some local officials have yet to take an official position on the issue.
The Indiana Convention and Visitors Association is reserving public comment until they can study the potential impact of the car rental tax on tourism.
However, the Colts management has made their position clear in a statement to the Indianapolis Business Journal:
“It would be unfair to our ticket holders, particularly in these economic times, to be hit with an additional tax on the tickets—and not just for us, but for all the events at CIB venues,” said Dan Emerson, the Colts’ vice president and general counsel. “It would be sending the wrong message.”