Bell pledges further push for ticket tax

3/10/2010

Even in the face of a possible legal challenge from Lucas County and strong opposition from different venues where ticket prices would be affected, Toledo Mayor Mike Bell was not dissuaded yesterday from pursuing his proposed admissions tax to generate new revenue for the city's $48 million deficit.

Mayor Bell has proposed an 8 percent sports-and-events tax on admission tickets as part of his plan to close the budget deficit. If adopted by council, it would generate $1 million this year.

Lucas County Commissioner Pete Gerken told Toledo City Council yesterday that the county would seek an immediate temporary restraining order if the tax is approved.

Mr. Gerken said an analysis by the county prosecutor's office found that Toledo cannot legally impose a ticket tax on events held at county facilities such as Fifth Third Field or the Lucas County Arena.

"The county took the risk five years ago, without a whole lot of risk from the city," Mr. Gerken said. "They cannot compel us to collect [the tax] or to disburse it back to the city."

The analysis from the prosecutor's office was contained in an internal memorandum released yesterday. The analysis is advice to a client - in this case the county - and it does not rise to the level of a legal court opinion. The analysis also remains under review, the prosecutor's office said.

The mayor, who offered the admission tax along with several other controversial proposals to balance the budget, was undeterred despite the analysis.

"We are going to keep moving forward until we balance the $48 million deficit," Mr. Bell said after council reviewed the proposed tax yesterday and heard from Mr. Gerken.

Council could vote next week on the tax, along with an increase in the trash-collection fee to $15, eliminating the payroll tax credit for Toledoans who work outside the city, and pay cuts for city workers by declaring "exigent circumstances."

Council yesterday placed all of these items on its March 16 agenda.

The prosecutor's office analysis, done at the request of Mr. Gerken, president of the Lucas County Board of Commissioners, relies on a 1965 Ohio Supreme Court ruling that the Lake County village of Willoughby Hills, Ohio, in far northeastern Ohio, could not impose a 3 percent tax on greens fees for a golf course within the village owned by the Cleveland Metropolitan Park District.

"We do not find any statutory provision that authorizes a municipality to impose a collection and remittance of an excise tax upon a governmental agency," the high court held.

City Law Director Adam Loukx said the city would prevail in court against the county.

"The question here is whether or not the Walleye and Mud Hens are political subdivisions. Clearly, they are not," Mr. Loukx said.

Mr. Gerken disagreed.

"They're owned by a political subdivision - the county," he said last night, also noting that in Ohio, counties are a subdivision of the state.

Joe Napoli, president and general manager of the Mud Hens and Walleye, said he was pleased with the legal analysis from the county prosecutor's office.

"Lucas County has a lot at stake," Mr. Napoli said. "The net proceeds from the Mud Hens, the Walleye, the arena, and the convention center are dedicated to the mortgage on all three buildings and the short-term and long-term capital repairs and maintenance of all three buildings."

Mr. Napoli said the tax would actually mean a net loss for the city because of the damage it would have on downtown businesses.

"It's really disingenuous when it's being touted as only 80 cents on a $10 ticket," Mr. Napoli said yesterday, before a meeting with the mayor.

A newly formed coalition against the tax is made up of representatives from the Mud Hens, the Stranahan and Valentine theaters, Fifth Third Field, Toledo Museum of Art, Toledo Symphony, Toledo Opera, the arena, the Toledo Zoo, and Imagination Station.

The group met early Tuesday with The Blade's editorial board to discuss its concerns.

Steve Miller, general manager of the SeaGate Convention Centre and the Lucas County Arena, said the group's meeting with Mr. Bell was productive and he is still hopeful the tax won't be approved.

"We respect what the mayor is doing and he is generally a good guy and a proponent for Toledo," Mr. Miller said. "No promises were made, obviously, but it's simply about the economic impact of downtown Toledo."

He said the tax would reduce the number of people buying tickets to events at Fifth Third Field and the arena and negatively affect downtown business owners.

"Our job is to supply people to downtown Toledo and as we summed it up, if you can't help us, don't hurt us by implementing this tax," Mr. Miller said.

Although Mr. Napoli said the Mud Hens and Walleye would have almost no choice but to absorb the tax because it probably would translate into a drop in ticket sales - especially season tickets - others including the opera and Toledo Speedway said they would have to pass on the cost to ticket buyers.

Ron Drager, owner of the Toledo Speedway, said he reduced ticket prices to draw customers and the tax would have the opposite effect.

"Nobody in Toledo is going to benefit from a ticket that doesn't get sold, and we have a concern that people are watching their pennies as close as possible," Mr. Drager said. "We have cut our expenses as far back as they can be cut, so I have grave concerns about raising those ticket prices because I have to pass along that tax."

Additionally, Ward Whiting, executive director of the Stranahan Theater, said promoters could choose to book acts in other cities because the 8 percent tax could eat into their profits as well as affect ticket sales.

The Mud Hens have protested the proposed tax, which the ball club has called a "Family Ticket Tax," on its scoreboard. It displayed the words with a huge red X through the word tax and a message to contact the mayor and Toledo City Council.

Contact Ignazio Messina at:

imessina@theblade.com

or 419-724-6171.