The following material was presented on this website in February, 2006, nearly ten years ago! It came to mind after writing the post two days ago about favorable financial treatment of the local basketball team. We thought it a reasonable follow-up reminder.
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"Today's post is offered as somewhat relevant to two subjects; the city's financial "crisis" and the hassle in the General Assembly about competition for the cable TV providers.
"In the Fall of 1996 the City-County Council increased the cable TV franchise fee from 3% to 5%, with the provision that the first 50 cents of each subscriber's bill would go to the Pacers (via the CIB).
"When we wrote Comcast at the time, with a copy to then Mayor Steve Goldsmith, we heard nothing from the company. We did, however, get a most interesting letter from the mayor.
"Here are some quotes from his letter, dated October 25, 1996:
" 'I am concerned that the consumers of cable television in Indianapolis are not receiving the best service available...I have encouraged the City-County Council to identify various methods for interjecting the element of competition into cable service.'
" 'A franchise fee is paid by cable companies to the city for the right to use its right of way for their wire. This charge is paid by the cable company, not the customer.'
" 'The Indianapolis City-County Council decided to raise the fee from the current 3% to the 5% maximum allowed. I directed the staff to find a way to use the additional revenues...'
" 'The new cable franchise agreement will ultimately benefit our whole community, not just the Pacers.'
"(Our emphasis added in all cases.)
"We'll simply offer a comment on each of the above citations.
"The first wording would seem to indicate that, were he still mayor, Mr. Goldsmith might favor the legislative proposal to allow more competition. At least he recognized more than nine years ago that something was missing from the equation from the consumer's standpoint.
"Concerning the payment of the franchise fee by the company and not the consumer, the subject wasn't covered this way in the economics textbooks we used.
"Referring to the third item, if Pacer subsidy was not the primary purpose of the action, why was it done at all? If the city was in need of funds, why did the mayor have to "find a way" to use the money? This bit of collusion simply allowed the city to give more money to the Pacers, with any balance feathering the cable company's nest.
"With regard to the last quote, we can only say that the subsequent increase in our personal cable bill was almost exactly 50 cents! The reader will no doubt have his or her own ideas about the concept of such a narrowly based tax. (Yes, we know the mayor said it was NOT a tax.)
"We suggest once more that a look back at taxing and spending policies be initiated before we sail off on a sea of new and/or increased taxes.* 50 cents per month, per subscriber, isn't much. Nor is another 10 or 15 cents added to the cost of your hamburger. But both are parts of an insidious, on-going program of skinning the taxpayers bit by bit to finance unnecessary expenditures, while at the same time avoiding raising funds for vital municipal services until such action can be justified by (frequently) misleading claims of fiscal crisis---such crisis being the result of the inappropriate diversion of the funds to begin with."
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This was just one of the steps toward the annual $16 million cash gift we now give the Pacers in addition to outrageous occupancy lease!