Invest A Little To Make A Lot More: Why Indiana Should Create An Event Incentive Fund To Leverage State Taxes

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In addition to looking at taxes to cut, let’s look at ways to invest a little to make a lot more. For starters, consider visitor spending where more than 26 million people who visit Indy every year generate more than $256 million in state sales tax revenue.  That’s more than the Hoosier Lottery, and that’s just from visitors to our capital city.

How can we increase visitor spending?

We are already the No. 1 convention city in the United States according to USA Today and one of “52 Places to Go in the World in 2014? according to the New York Times. We have the most connected hotel rooms. We have some of the best facilities with the airport, Indiana Convention Center, Lucas Oil Stadium, and Bankers Life Fieldhouse, not to mention several great hotels and a vibrant downtown.

Thanks to the powerhouse combination of the Capital Improvement Board, Indiana Sports Corporation, and Visit Indy, Unigov’s simplified local government structure, and generous corporate support, we are able to attract and expertly manage many events and conventions every year, including some of the biggest and best.

Frankly, we’re awesome. (Oops, I forgot the requisite Hoosier modesty. My bad.)  But, we can still do more to increase visitor spending.

First, we need the General Assembly to create an event incentive fund like the one in Texas. Rather than just rely on local government and corporate dollars, Texas leverages state taxes to help secure events. So, we cannot afford to rest on our laurels as our competition is getting tougher. It’s also smart policy like tax incentives where the thinking is: but for the incentive, the growth would not occur. Regardless, it just makes sense since the State profits so well from Indy’s visitors.

In fact, a program like this managed by the IEDC or Indiana Finance Authority should allow every community in our state to apply to leverage state funding to attract revenue-generating events. When we secure events that we might otherwise would not have been able to secure, tax generation goes up, more hospitality industry wages are generated, and our quality of life improves.

Second, we need to follow through on Phase 6 of the Convention Center expansion. If you stand on the southwest corner of the intersection of Capitol and Maryland and look south, you will see that the newer section near Georgia Street does not connect seamlessly to the older section to your right.

The plans to do it exist, but it will take about $20 million. That’s a rounding error to a state budget surplus of $2 billion, but we don’t have to dip into the state’s reserves. A one-time increase of the cap to something called the Professional Sports Development Area will allow that to be easily financed. The result will be a better visitor experience and increased tax revenue over time.

Now, I am a bit biased. I believe that we should invest in pro-growth strategies along with other tax reforms. I am a member of the Visit Indy board, and I want Indy to have the best tools to compete with cities in other states for events and conventions. (I want that for Evansville, Fort Wayne, South Bend, and others too!) I am also an Indy resident, and I am proud that our city generates so much value to our state—more value than we receive in state tax dollars back. And, I’m a Hoosier who likes to see out-of-state visitors see why Indiana is a great place not just to visit, but also to live and work.

Topics:  Economic Development, Hospitality Industry, Tax Revenues, Tourists

Published In: General Business Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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