The owners of the Cleveland Browns, Indians and Cavaliers lease their teams’ facilities from the city, and from the city and county administered Gateway Economic Development Corporation. The sin tax, which expires next year, helped build the baseball and football stadiums and the basketball arena. The revenue still helps maintain them, and Joe Roman wants that arrangement to continue. He’s CEO of the Greater Cleveland Partnership, an economic development organization, and spokesman for the Issue 7 campaign, which supports extending the tax. Roman credits the tax with helping keep professional football and baseball teams in Cleveland, and bringing the basketball team downtown.
“One was playing outside our county, one left in 1995, and one was being told to get out of town if you didn’t get a new facility. And we put together a partnership in 1990, renewed in 1995 that helped build three competitive sports facilities to stay as one of only 15 U.S cities that had these three kinds of teams. It’s part of being a big league city.”
If Issue 7 fails, who pays?
Roman says renewal will keep these facilities competitive for another 15 to 20 years. The tax amounts to an extra 4.5 cents on a pack of cigarettes, and two cents on a can of beer. It’s raised about $320 million through 2012.
If voters don’t renew the tax, the city and county are still obligated to pay for maintenance on the sports facilities. But Peter Pattakos with the grassroots Coalition Against the Sin Tax says there are better ways to do that.
Better ways to raise the revenue?
“A few dollars extra per ticket for people who actually use these facilities. Or a multi-county tax that would account for the fact that more than 5 percent of these users come from outside Cuyahoga County. We heard the pro sin tax people say about 75 percent of the users are from outside the county, so why should Cuyahoga residents shoulder the burden.”
But tax supporter Roman says these alternatives have drawbacks, starting with the admission tax.
“We already have one and it’s one of the largest in our area. So a new admissions tax would simple inflate the price of a ticket. Other taxes that have been suggested, like a multi-county tax, well that’s a great idea, but you have to change state law to do that. And the environment for raising new taxes in our state isn’t strong right now.”
Still Pattakos argues, it’s simply too hard to track the sin tax revenue and to know how it’ll be spent.
Transparency is an issue for sin tax opponents
“We know a significant portion of the hundreds of millions of dollars that has been collected has gone to the owners. But we don’t know for what, and don’t know just how the public’s so call obligations to these sports teams have been resolved by application of previous sin tax revenues. Nor do we know how these proposed new sin tax revenues will be applied to resolve these obligations to the owners, whatever these are.”
But tax supporter Roman takes issue with that.
“We went through a month of hearings and laid that out on the line, the teams showed what they were going to spend these dollars on, as best as they can forecast out 15, 20 years ahead. So I think we’ve been very transparent. And like anything else, these are 20 year old facilities. Give or take. And yes they do need new roofs and chillers and two of them need major concrete repair because they sit outside all year long.”
But that’s not all. Two of the teams are also asking for help upgrading to new scoreboards, and some taxpayers and government officials say that goes too far beyond regular maintenance. It’s common practice across the country for public money to support major sports facilities. But many sin tax opponents suggest the wealthy team owners should start taking more financial responsibility for the stadiums and arenas they use. Tax supporters like Roman say that can backfire. In the 1970s former Brown’s owner Art Modell assumed all financial responsibility for the old Cleveland Stadium. Roman says that made it easier for Model to move the Brown’s from Cleveland to Baltimore in the 1990s.
Why making wealthy team owners pay won’t work
“When there’s a partnership involved where everybody is playing their role, corporate community, taxpayers, government and the teams, you have more staying power to keep those important assets in town.”
Roman says Cuyahoga’s current sin tax is part of that partnership. It doesn’t expire until September of next year, and supporters could try again in May 2015 if Issue 7 fails this May.