February 24, 2009

Ticket tax in works for Indy?

With Indiana facing a $43 million a year operating deficit on its sports facilities, there's increasing talk of a ticket tax hike on sporting events to help close the gap. "Of all the potential funding sources, the ticket tax makes the most sense to me," said City-County Councilwoman Joanne Sanders told the Indianapolis Business Journal. "I think true users of the facility should have to pay. The direct use is an important thing to look at."

Both the Indianapolis Colts and minor-league baseball Indianapolis Indians have come out against the tax, and little wonder: Most economists agree that ticket tax money mostly ends up coming out of team owners' pockets, as they're forced to scale back their ticket prices to keep the ticket-plus-tax price within the bounds of what consumers will pay. The Colts, for example, just hiked their cheapest ticket price by 42% - if there were a ticket surcharge in there as well, they'd have to be more concerned about driving fans away. (Though not all that much more concerned, given that at most, we'd be talking about a 3% tax hike from the existing 6% ticket tax.)

Of course, there's also the problem that even a 3% ticket surcharge would bring in only about $2 million a year - and, as noted, the state stadium authority is facing a $43 million a year deficit. Somehow I don't think a 60% ticket tax is going to fly, no matter how fair the "users should pay" argument may be.