Ticket tax could result in significant harm to Toledo

3/11/2010

TOLEDO Mayor Mike Bell and the City Council have inherited a great challenge in addressing the city's fiscal crisis. They are honorable leaders who love Toledo, and they are between a rock and a hard place.

Those of us who represent the arts. cultural, sports, and entertainment communities are imploring our city leaders to withdraw voluntarily the proposal to levy an 8-percent tax on tickets to our events. We have expressed our concerns to the mayor's office and several council members that the tax would have serious consequences far outweighing the revenue the city would collect.

The admissions tax ordinance is pending before the council. Mayor Bell has said he will pursue it despite a legal opinion that the city cannot impose the tax on events at county venues, such as Fifth Third Field and Lucas County Arena.

Is it wise to raise ticket prices, as the tax would do, during the deepest, longest recession in 40 years? If you knew that attendance has declined by as much as 18 percent at some venues in recent years, would you raise prices by 8 percent?

The past two years have been tough on our fans even without an increase in ticket prices. Toledo is the nation's eighth most impoverished city, according to the Census Bureau. One out of four Toledoans lives below the poverty line.

Thousands of people couldn't afford to visit us last year, nor will they this year. In fact, 350,000 fewer tickets were purchased to our events last year than in 2008.

Although attendance rose at the Toledo Zoo last year, that was largely the result of Lucas County residents taking advantage of free-admission Mondays and special weekends. An anonymous donor provided thousands of free tickets to Mud Hens games to low-income fans.

An analysis by Scarborough Market Research concludes that 83 percent of area families and 72 percent of adults over 50 would be affected by the proposed ticket tax. No one is spared: 31 percent of people paying the tax would be in blue-collar households, and 34 percent in white-collar households. The remaining 35 percent would be students, retirees, disabled people, or unemployed people.

The mayor's office has suggested that the tax is "only" 80 cents on a $10 ticket. If you're married with children, you'll attend some events with the kids, some with your spouse, some with friends. If you're single, you'll call some friends, or make it a date night.

Let's make a few assumptions: You attend two events per month, buying four to six $20 tickets per event. You'll pay $153.60 to $230.40 a year in ticket taxes.

The city projects it will collect $1 million annually from the tax. That amount represents the equivalent of 125,000 fewer tickets to the zoo, or filling up Fifth Third Field more than 13 times. It would no longer be your money to spend on the fun things you like to do.

Toledo is unique in that practically every beloved venue and sports team is a not-for-profit institution. Every penny of our net proceeds is reinvested in our community, and dedicated to mortgages, operations, and maintenance. You are the owners; we are simply the caretakers.

We've tightened our belts. Our employees have accepted wage freezes and benefit cuts. We've cut seasonal staff hours. Some of our organizations are running significant deficits.

The State of Michigan has twice defeated a similar "fan tax." Toledoans still can travel a few miles north and enjoy tax-free entertainment. Meanwhile, Michiganders who now love to come to affordable, accessible Toledo will stay home.

Toledo's proposed tax is modeled on Cleveland's - but there are big differences. Cleveland's symphony and zoo are exempt from the tax, as are live performances conducted by nonprofit organizations. Events at Cleveland's Quicken Loans Arena are exempt as long as there are outstanding bonds on the facility.

Cincinnati has a ticket tax of 3 percent. Columbus decided against imposing an admissions tax because, like Toledo, it does not have major-league football, baseball, or basketball teams that would bear the bulk of the tax. Columbus cannot tax admission to events sponsored by a public institution, notably Ohio State University.

The city council in Mason, Ohio - the home of the Kings Island theme park - recently voted against a ticket tax, even though the proposed ordinance exempted nonprofit groups.

Promoters tell us that if Toledo enacts the tax, they'll move their shows elsewhere. Do the math: Tourism in Lucas County generates $1.6 billion a year in sales. It accounts for $421 million in wages, $208 million in taxes, and 19,000 jobs.

With your hard-earned dollars, you create "economic impact." These dollars employ your family and friends. Think of all the ways that happens: You hire a baby-sitter, buy gasoline, grab a bite to eat, get some souvenirs for the kids.

For a special night out, you might buy new clothes. You visit a restaurant and enjoy a weekend getaway at a local hotel. These activities make entrepreneurs who have invested millions very happy. They also create taxes, revenue, and jobs.

The proposed ticket tax threatens all of that. We understand that the city is in a tight spot. But we implore the mayor and council: Please withdraw this counterproductive proposal.

Joseph Napoli is president of the Toledo Mud Hens and Toledo Walleye. He submitted this essay on behalf of leaders of the Toledo Symphony, Toledo Opera, Toledo Speedway, Imagination Station, Toledo Zoo, Toledo Museum of Art, Valentine Theatre, Stranahan Theater, SeaGate Convention Centre, Lucas County Arena, and Fifth Third Field.