Tuesday, January 21, 2014
County discusses vote to extend 'sin tax'
By Pat McManamon
An interesting process begins Tuesday as representatives of Cleveland’s three professional sports team will appear in front of the Cuyahoga County Council to make their pitch to extend the “sin tax.”
The teams are asking for a 20-year extension of a tax on alcohol and cigarettes to fund continued maintenance of the stadiums and arena that hosts the Cavs, Browns and Indians.
And they’re doing it in a climate where the Browns' public image is hurting. The Browns last year were provided $30 million from the city for $120 million in stadium upgrades, the balance paid by the team. At the time, Browns CEO Joe Banner said the team was a big supporter of the sin tax.
As it should be, because without the sin tax the team or the city would have to find money to upgrade and/or keep the facilities up to date. These include new scoreboards that produce huge revenues for the teams. The Plain Dealer reported that the Indians and Cavs will ask for new scoreboards as part of their proposal for improvements.
The beginning of the discussion is emblematic of what is happening in many cities. Teams use their leverage to garner money from cities and counties for facilities. The selling point is the goodwill, quality of life and money generated by teams, which bring people to downtown areas. The negative is a good bit of money going to professional sports in a city that is struggling.
The original sin tax helped build new baseball, football and basketball facilities in the 1990s. The leases in place require the teams to pay for operating the stadium, and the city to pay for necessary maintenance. Cosmetic upgrades are the responsibility of the team, which keeps the revenue from selling naming rights.
What will be interesting is how the public reacts to the climate of negativity that surrounds the teams, especially the Browns, who haven’t won more than five games in any of the last six seasons. The Cavs are still trying to bounce back from losing LeBron James.
Only the Indians have made the playoffs recently, but they seem to take the most grief from fans even though they have the best operation of any local team.
Plain Dealer editorial cartoonist Jeff Darcy summed up some of the feelings in town with his drawing today. In a column that went with the cartoon, Darcy called the sin tax “continued corporate welfare for the super-rich.” He continued: “Does a billionaire owner, who doesn't hesitate to kick $10 million out the door along with his first year coach (Chudzinski), and signs off on paying $3 million + for a player who tweets pot pics as often as he drops passes (Davone Bess), really need to be given more feed from the public trough? Timing's everything.”
Most voters probably don’t even realize the details of the financial workings. The city collects an eight percent tax on every ticket sold at First Energy Stadium, but the city pays the property tax on the land beneath the stadium ($646,000 in 2012).
The sin tax extension is projected to raise $260 million. Business leaders in the city favor the tax and call the investment a good one. The teams love the tax.
Eight of 11 Council members must vote yes to send the tax to voters in May.