|By Bill Ruthhart, The Indianapolis
StarMcClatchy-Tribune Regional News
Oct. 15, 2009--Finally, Indiana has some good financial news.
The mix of Marion County and suburban tax collections that pay the debt on the nearly $1 billion cost of constructing Lucas Oil Stadium and expanding the Indiana Convention Center are beating state projections.
Revenue for the mammoth projects has topped $157 million since the inception of the taxes and fees in 2006 through June.
That's $17.5 million, or about 12.5 percent, more than state finance officials estimated in 2005 when the legislature and City-County Council increased a variety of local and regional taxes to pay for the projects.
That additional money is being used to pay down the debt early as required by state law.
Still, it will take most of the next 30 years to pay for the $720 million stadium that opened last year and the $275 million it will cost to double the size of the convention center. That project is scheduled to be done next year.
Once the projects are paid off, the legislation that created the tax increases calls for them to expire.
The largest of those in Marion County are the innkeepers, food and beverage, and auto rental taxes.
Food and beverage taxes in six suburban counties also go toward the two projects, as do admissions taxes from Indianapolis sporting events, fees from the state's Colts license plates and revenue from the city's professional sports development area, which collects sales and income taxes from the sports arenas and teams.
In fiscal year 2009, the taxes delivered $46.6 million, which was down slightly from the $46.8 million generated in 2008 but still nearly $6 million above projections.
While stadium and convention center tax revenues held flat those two years, the state's overall revenues during the same period were down by more than 7 percent.
"We're going to continue to watch this closely," said Ryan Kitchell, director of the state's Office of Management and Budget. "But given everything that has happened with the economy, we feel very good about the position we're in."
Kitchell said the tax collections have held steadier than overall state revenue -- short $254 million during the past three months alone -- because food and beverage, innkeepers and auto rental taxes in Central Indiana have been more resilient during the economic recession than the statewide income and sales taxes that make up a majority of the state budget.
Also, the state's revenue projections for the stadium and convention center were extremely conservative.
Before state financial officials drew up the stadium and convention financial projections in 2005, they reviewed 20 years of history on the Marion County food and beverage, innkeepers and auto rental taxes. Historically, those tax revenues had increased by an average of 3 percent to 4 percent per year, but state officials contemplated only a 1 percent annual increase in their projections.
Also, without history to go on, the state's projections for the suburban taxes, license plate proceeds and sports district turned out to be far less than what those three revenue streams have produced.
For example, last year the sports district generated $9.2 million, nearly double its $4.8 million forecast. The same goes for the Colts license plates, which brought in nearly double the $500,000 they were expected to generate last year.
In 2008, more than 43,000 Hoosiers bought the Colts license plate, making it the fourth-most popular of the state's 32 specialty plates, said Graig Lubsen, a spokesman for the Bureau of Motor Vehicles.
Kitchell said the tax projections to pay for the stadium and convention center expansion were very cautious for a reason: The state guaranteed the debt payments to secure the lowest interest rates possible. That means if for some reason the tax revenue fell short, the debt payments would have to come from the state.
"The governor was adamant that we would not use general fund money to pay for this," Kitchell said. "So he wanted to make sure we used very conservative revenue projections for these taxes in the event there were some problems."
So far, those projections have proved to be recession-proof.
Figures for the first quarter of fiscal year 2010 compared with 2009 don't show major signs of that changing. Tax collections from July through September were $10.2 million, down slightly from $10.5 million over the same period last year.
"If this keeps up," Kitchell said, "we could be in the rare position of a state that's actually paying something off early."
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