Subscribe
Jobs
Cars
Real Estate
Apts
Classifieds
Shop
INDIANAPOLIS – Alcohol taxes statewide would double as part of a plan unveiled Wednesday to address a shortfall Indianapolis has in running its sports facilities.
But if approved, the money from the increased alcohol taxes would go to cities and towns around the state – not just Indianapolis.
For instance, estimates predict the city of Fort Wayne would receive an additional $2.6 million in fiscal year 2010 under an amendment, which will be voted on this morning. The money could be used for any economic development purpose.
“It’s a sweetener for cities and towns across the state, but I am always concerned about any tax increases, especially in these economic times,” said Rep. Randy Borror, R-Fort Wayne.
The proposal will be added today to House Bill 1604 in the Senate Appropriations Committee, and a vote on the entire measure is expected. The core of the legislation establishes an Allen County-Fort Wayne Capital Improvement Board and diverts local excess food-and-beverage tax money to that board.
But it will soon contain a bailout for the Indianapolis Capital Improvement Board, which is running a $47 million annual operational shortfall.
“I think it’s important to have contributions from everyone who has a stake,” said Sen. Luke Kenley, R-Noblesville, who is spearheading the issue. “We think this is a good start.”
But he also admitted to “trepidation” about the idea of raising a statewide tax.
The bailout breakdown is a mix of concessions from the Colts and Pacers, operating cuts, increased admissions taxes at the sports venues, increased food-and-beverage and innkeeper taxes in Marion County and Indianapolis’ portion of new alcohol-tax dollars.
The state would also expand the Indianapolis Professional Sports Development Area to allow the city to keep an additional $6 million in sales tax revenue from a new convention hotel.
But Kenley conceded the teams haven’t fully committed and Indianapolis Mayor Greg Ballard did not endorse the plan, specifically showing concern over the hospitality tax increases.
The statewide alcohol-tax increase would bring in an additional $42 million annually. Only a small portion of the current alcohol tax goes to cities and towns, but all of the increase would be distributed to the units.
“With everybody having tight budgets, this opportunity for an additional revenue stream will help,” Kenley said.
Alcohol taxes are figured per gallon and essentially would double for beer, wine and liquor. This would mean an additional 26 cents per case of beer; 9 cents per bottle of wine and 53 cents per fifth of liquor.
Indiana alcohol taxes haven’t been increased since 1981, and Kenley said paying the additional alcohol tax is a “voluntary exercise.”
Indiana health and safety advocates sought a 50 percent increase in 2003, but the effort failed.
Brad Klopfenstein, executive director of the Indiana Licensed Beverage Association, said the alcohol industry is one of the few industries to have a specific excise tax in addition to the state sales tax.
“So we have been paying our fair share,” Klopfenstein said. He added that the hospitality industry already accepted tax increases to build the sports venues that now need more money to operate.
“There is not a never-ending well of money in the bar and restaurant industry,” Klopfenstein said.
