June 26, 2007

Throw another $40M on the Colts fire

More evidence that friends don't let friends read newspapers called "Star": The Indianapolis Star reports that the new Colts stadium will cost as much as an extra $40 million over its previous $675 million price tag, thanks to increased costs for steel, insurance and environmental cleanup. (As was predicted last August.) Not to worry, though, writes Star reporter Karen Eschbacher, because "officials say they won’t need new taxes to pay for it."

And how will the state perform this feat of free lunchdom? Because "taxes used to pay for construction are coming in stronger than anticipated," explains Eschbacher, the additional revenues can be used to sell more stadium bonds. What she doesn't mention is that this means if the stadium cost hadn't gone up, the state could have used the higher-than-expected revenues to pay off stadium bonds sooner - freeing up state money for other uses, including cutting taxes, if it likes. So "officials say they'll just dig deeper into existing state funds" would have been a more accurate (if less dramatic) lede.

Eschbacher also goes on to note:

While the stadium project needs more money, officials point out that the additional money will simply bring them back to the price tag that was originally projected.

The overall budget for the stadium and convention center projects originally included $90 million in contingencies for unforeseen expenses.

But that number got chopped to $50 million so the rest could go toward a lease termination payment the city owed the Colts.

So it gets the state back to the stadium price tag that was expected, but not the subsidy price tag, which is still going up by $40 million. And that's before we even get into the $10 million a year operational subsidy that the state still hasn't worked out.

Total stadium subsidy critics and/or independent experts quoted in the article, incidentally: zero.