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Sin Tax Extension Debate Fires Up Cuyahoga County

Monday, February 10, 2014 at 5:53 PM

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The stadium, field, and complex where the Browns, Cavs, and Indians play before regional sports fans (pic: Brian Bull)

In May, Cuyahoga County voters will decide whether to extend a long-standing tax on tobacco and alcohol to help maintain and modernize the city's publicly-owned pro sports facilities. The current so-called "sin tax" has been in place since 1990. It’s raised about $350 million, almost all of which has been used to pay off the debt on Progressive Field and Quicken Loans Arena. The question of whether to extend it another 20 years – through 2035 - made for a spirited discussion today on 90.3’s call-in show The Sound of Ideas. ideastream's Brian Bull reports.

Sound of Ideas host Mike McIntyre opened the show by reading a few provocative comments from local entrepreneur, Alan Glazen, who railed against extending the sin tax on his Facebook page.  Glazen claimed the Gateway complex – home of the Indians and the Cavaliers - never produced the 28,000 jobs promised, and argues extending the sin tax amounts to further “hosing” the citizens who pay it.

Mike’s guest Tom Yablonsky, Executive Vice President of the Downtown Cleveland Alliance, was happy to “respond to that rhetoric”. He said many people misunderstood the jobs goal, and that the total of jobs created – from temporary construction jobs to permanent ones tied to neighborhood businesses, actually came closer to the number promised than many realize.

“People thought we’d get brand new development, new office buildings,” began Yablonsky. “Instead, we got a mixed-use neighborhood which was better for Cleveland.  Because we created three nationally-registered historic districts adjacent to those facilities, and over time, almost 25 years, we’ve gone from almost no restaurants to 38 restaurants, no housing units to 19 residential buildings, no hotels to five hotels, with four more on the way…”

Cleveland City Council President Kevin Kelley wants an extension, though he preferred to use the term “excise tax” instead of “sin tax” in his remarks.  Kelley says the city has an obligation to maintain its major sports venues for the Browns, Indians, and Cavs.  He says without an extension, the city would have to dip into the general fund.

“Is it going to come out of the fund that pays for police officers, pays for firefighters, is it gonna come out of the fund that pays for my kids go to parks, and play at the park?” asked Kelley.  “We have to pay this.  There’s two bundles of obligations.  One is the debt, one is the capital.”

But South Euclid City Councilman and attorney Marty Gelfand says there simply needs to be more discussion on other options. 

“Now is not the time to ask us for more money that benefits the very wealthy few out of the pockets of people who can least afford it,” said Gelfand. “And if you are wealthy and you live in Solon or Westlake, you can just go across the border and buy your booze or cigarettes.  But if you live in South Euclid or Cleveland, you’re not going to cross the county line, you’re going to pay that tax.”

Gelfand was in good company.  Most of the emails and calls opposed a sin tax extension.  Some questioned why the stadium should benefit, when the money could be used to fix roads, improve schools, and other city infrastructure and services.  One pointed out the $100 million naming rights deal the Browns recently made with First Energy – changing Browns Stadium to First Energy Stadium.  Caller “T.J.” from Lakewood suggested a performance-based system:

“Why continue to pay the sin tax where the owners are just putting pathetic products on the field?,” asked T.J. “Look at the Cleveland Browns, they’re terrible.”

And then there was this email from “Chris” - read by Mike McIntyre.- on what should be done if the sin tax extension passes:

“’There ought to be a designated seating area directly below the brand new scoreboard’”, began McIntrye, reading from a studio monitor, “‘where smokers can enjoy a Marlboro while swigging a jug of whiskey and enjoying the fan experience that they helped pay for.’”

A few calls in favor of the sin tax came in – but only after some pleading and nudging from McIntyre. 

“Mike” on the West Side was only a grudging supporter. He said he largely agreed with the reasons not to have the tax, but fears the vendors would keep all the savings.

“The money might as well go to the stadiums rather than to the beer and cigarette sellers,” he said.

If voters approve the sin tax extension come May, backers say it’ll generate about $13 million a year. 

Victor Matheson, an economics professor with the College of the Holy Cross, says taxes on cigarettes and alcohol are generally good generators of money.  But he adds Cleveland has among the lowest ticket prices in the NFL, and perhaps there’s room from there to grow…revenue, that is.

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Economy, Community/Human Interest, Government/Politics

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