Tax plan has shot

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April 6, 2009

Anonymous The Kokomo Tribune Mon Apr 06, 2009, 10:13 PM EDT

THE ISSUE:Doubling the state’s alcohol tax.

OUR VIEW:Many Hoosiers can swallow adding a penny to the price of a can of beer.

At first glance, the plan seems almost too good to be true.

State lawmakers think they can generate $40 million to help Indiana’s cash-strapped cities by doubling the state’s tax on alcohol. The proposal would add about a penny to the price of a can of beer and a dime to the cost of a bottle of wine.

The whole thing started as an effort to rescue the board that runs the professional sports venues in Indianapolis. About $8 million of the revenue would go to that board.

But the rest would be divided among the state’s other cities and towns based on population. Bluffton, a town of about 9,500, would get nearly $100,000 while Marion, a community of about 31,000, would collect $300,000.

As it now stands, the money would go toward economic development, but mayors who appeared before a Senate committee last week said they really needed the money for basic services such as police and fire protection.

The plan might turn out to be a stroke of genius.

The Indianapolis Capital Improvement Board expects to be $47 million short in its operation of Lucas Oil Stadium, Conseco Fieldhouse, Victory Field and the Indiana Convention Center. That’s way too much money for Indianapolis to come up with on its own, so supporters had to find a way to get help from the rest of the state. They seem to have found it through what would appear to be a relatively painless tax and a plan to offer help to city officials concerned about how they will pay the bills with declining property tax revenues.

It’s hard to say, though, whether the plan will really work.

Some city officials are saying they’ll need far more than the alcohol tax will generate to make up for their declining revenues, and it’s not at all certain that the other aspects of the stadium bailout will fly.

Among other things, the plan includes a tax on Indianapolis hotel rooms that some say would be among the highest in the nation. It also calls for contributions by the Colts and the Pacers, neither of which has agreed to play along.

Still, at a time when the economy is struggling, it would be next to impossible to sell the idea of a general tax increase. Adding a penny to the price of a can of beer, on the other hand, just might win approval.

– Pharos-Tribune, Logansport, and Kokomo Tribune

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