News Media Unlikely to Tell You
By Roldo Bartimole
No one else will do this so I might as well.
The bookkeeping below give some of the escalating costs of the 1990 decision to build Gateway.
It’s necessary to examine and tote these costs because the principal outlet for public information – The Plain Dealer – will never do it. Before getting into the figures, something has to be said about why these public costs escape the public realm.
“Those who cannot remember the past are condemned to repeat it,” said philosopher George Santayana. What then happens when the past is distorted by gross omissions?
The PD, the paper of record here, advises the public repeatedly with copious data of sports teams, present records, past records and individual achievements of all kinds. However, the PD will not remind us with even a smidgen of news on the public costs of these sports venues. It’s too disturbing apparently. If there is not a press release of some kind, the PD lives cozily in Sleepy Hollow.
In this manner, the news media corrupts public discourse by failure to notice. This safe structure frames news in favor of elites by essentially ignoring it.
The Plain Dealer was strongly in favor of building Gateway despite the clearly predictable financial troubles for the public. It ignored or distorted the truth and continues to do so.
Nevertheless, here’s some of the sordid story of 15 years of public subsidy of wealthy owners – two of whom have sold the teams at tremendous profits in the hundreds of millions of dollars. The public still pays despite public poverty of local government.
Meanwhile, you can all see the tremendous economic boon Gateway and Browns Stadium have meant for the city. We wanted to remain a Major League City. What we have attained is a city of Major League Poverty.
This accounting is most important now because we are being beseeched once again to subsidize heavily another building project – a new convention center. Thus, repeat the past because we can’t remember the past.
The Plain Dealer remains incapable of truthfully examining the convention center issue, as it was with Gateway. Thus, you see Mayor Jane Campbell following the tune set by the corporate community – ignore the Cleveland schools, allow the convention center to be on the ballot, and let the PD tell us how we need this boost.
Here goes the latest accounting for our past sins.
The financially strapped Cuyahoga County last month wrote a check to bondholders for $4,958,753 to pay bondholders of $75-million and $45-million county-issued bonds. The funds were to meet costs that rose above the expected sin tax collections. The voting Commissioners at the time were Tim Hagan, Jim Petro and Mary Boyle. The $4.9 million came directly from the 2005 County’s general fund.
Hagan, principal architect with Mayor Michael White of Gateway, last week questioned Metro Hospital's desire for more County money. “We are now in deficit spending and the community seems to have an impression that the county commissioners can print money.” Hagan apparently can read a financial statement only when convenient.
I didn’t hear Hagan, back on the county payroll, yelp for the Cleveland baseball and basketball owners to help the County pay that $4.9 million in January.
What is another $5 million for Gateway at this point, you may say.
Actually, the bondholders got more than that sum, because other funds helped reduced the payment by the county. The total cost to bondholders was $9.4 million. Unfortunately, every extra penny was diverted from county and city funds.
Here’s how: In addition to the $4.9 million check, several other sources of revenue were tapped to pay bondholders $9.4 million, including city admission taxes of $2,128,092, which should have gone to the city of Cleveland. Likewise, $919,665.94 in sin taxes revenue deemed “excess,” and $212,180 of the county bed tax both were paid to bondholders. The rest came from interest earnings that instead of reducing the county burden went to make up the final difference.
Neither Gateway nor the team owners paid a penny to bondholders. Thanks again, Tim.
You need, however, to look at that $9.4 million as just one of many payments now made by County taxpayers. These are funds in addition to the sin taxes to pay for Gateway. The total sin tax paid by Cuyahoga drinkers and smokers at the end of 2004 was $230.9 million. Thanks, tight-fisted Tim.
By adding the January payments, the total subsidy for the bonds have cost Cuyahoga County taxpayers a very large $87,030,496 over the life of the bonds so far. Moreover, the payments continue for years. The $75-million bond was issued in 1992 and the $45-million bond in 1994, both for 30 years! The debt continues to be paid to 2024.
Neither team nor Gateway has paid one cent of the principle or interest on these bonds. Nice work, if you can get it. With political friends you CAN get it.
Unfortunately, dear taxpayers, that isn’t the end of the story. In March, Cuyahoga County will again dig into its general fund for another $250,000 for one of its ten annual payments (The City of Cleveland also pays an equal amount annually). These local payments go to pay back $10 million of no interest loans made by the generous State of Ohio for Gateway’s overruns.
The County also infused Gateway with $11.5 million cash in the early 1990s to cover overruns. County generosity abounded.
Don’t expect Gateway ever to pay this back. Don’t expect the Gunds, the Jacobs, Dolans, or any future owners to pay a penny of these debts.
The County also dipped into its general fund for $2,244,980 to repay the Cleveland Foundation for money the foundation lent for the construction of Gateway.
If you add all that up it comes to nearly $350 million. Many more payments will be made until 2024. Of course, the sin tax has been extended for 10 more years until 2015.
This does not consider another major tax gift to the multi-millionaire owners: Tax exemption on their property in perpetuity.
None of the construction at Gateway – Jacobs Field, Gund Arena, offices and the city garage – pays any property taxes on its facilities. Neither does the seldom-used Browns Stadium pay such taxes. These properties will never pay taxes since they are not simply abated but exempted. They have the holy status of a church or synagogue.
How much does this cost the public?
For the year 2001, the tax gifts on property were as follows: Jacobs Field $2.9 million; Gateway garage $340,000; Gund Arena $2.27 million; Browns Stadium $4.8 million for a total of some $10 million.
So count the years of lost revenue at some $10 million each year.
That means hundreds of millions of dollars lost. Most would go to the Cleveland schools, but also some to the county, city, and city library.
Can we expect Mayor Jane Campbell, as she seeks reelection, to be responsible and tell the community that it must once again vote for a school issue? Can we expect candidate Frank Jackson to give the schools more than political lip service?
Naw, both of them will play political games. Cleveland residents will be voting in May for a new convention center. Forget the schools.
After all, look at the jobs produced by Gateway. (Laugh now.) How can we pass up another such attraction that produces highly paid jobs? Right, John Ryan. Right, Plain Dealer. Right, Mayor Campbell. Right, Commissioner Hagan.
Gateway’s continued costs predict what building a new convention center will mean from the people who always enjoy sending the bills to someone else. You, the taxpayer.
Campbell Needs To Jettison Re-Election Plans
The appearance of desperation signals trouble for a politician. Mayor Jane Campbell exudes that odor with some hasty decisions that apparently were meant to reveal action.
However, her political anxiety reveals itself in such hasty offerings of casino gambling and electronic red light monitors, both terrible decisions for a city of poor people.
It’s not out of character, however, with the state of politics in America today. The trend from our President to Governors to Mayors is how to tax ordinary people while cutting taxes of the wealthy.
Governor Bob Taft apparently wants to extend the death penalty to the elderly poor with his planned cutbacks, slicing money for medical disability for the elderly poor. (At the same time, Republican Taft wants a 20 percent cut in state income taxes for the richest Ohioans, from 7.5 percent to 6 percent.) President George Bush would do the same by having us play roulette with Social Security. Mayor Campbell would try to raise tax funds by mechanically catching drivers at red lights and procuring a take from those hoping to shortcut their way to wealth with their weekly paycheck.
Campbell’s desperation also shows in her decision not to seek a tax increase for Cleveland’s schools. Mayoral control of the schools comes back to bite the schools. Will Campbell also say there will be no tax for a convention center? If not, we know the basis for her decision on the schools – catering to the corporate community.
Mayor Campbell should show the fortitude this year to make decisions based on the needs of Clevelanders. My advice is to do just that by putting the school levy on the May ballot, and then announce she will not run for re-election. Campbell would do well to go to law school, become a lawyer, and run for a judgeship. She simply does not make it as a manager or politician. from Cool Cleveland contributor Roldo Bartimole
Roldo@Adelphia.net
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