Proposal of alternative to sin tax prompts misleading and revealing response from Cleveland’s political and business leaders on Issue 7

by Cleveland Frowns on April 21, 2014

On April 11, the Coalition against the Sin Tax (“CAST”) formally presented an alternative to the 20-year $260+ million Sin Tax that’s been proposed to pay for maintenance of Cleveland’s three pro sports facilities, on the ballot in Cuyahoga County this May 6 as Issue 7.

In response to CAST’s proposal, the political and business leaders responsible for the Pro Sin Tax “Keep Cleveland Strong” campaign (“KCS”) issued what Belt Magazine’s Dan McGraw called a “fierce … aggressive, arrogant retort,” “terminally flawed [in its] logic.”

A closer look at the Pro Sinners’ “terminally flawed” response to CAST’s proposal shows just what a bad deal Issue 7 is for Cuyahoga County. It also shows how badly democracy fails in a political system where the influence of money on elections is effectively unlimited.

Keep Cleveland Strong

CAST’s proposal, available here and embedded in full below, is for a “Fair Share” Facility Fee — a government-imposed surcharge of $3.25 to be added to each of the 4-or-so million tickets sold for all events at the three sports facilities each year. Based on the most recent attendance numbers, the Facility Fee would raise the same amount of revenue as the proposed Sin Tax, and would fairly put the burden to maintain the facilities on those who actually use and profit from them.

We already know that a facility fee is a workable solution for several reasons, including because the Cavaliers and Quicken Loans Arena already pocket a $3 Facility Fee for every event at the Q that doesn’t involve one of the teams that Dan Gilbert owns. This includes monster truck shows, comedy shows, and mid-major college basketball games like the MAC Conference tournament. CAST’s plan merely extends the implementation of this fee that Dan Gilbert already charges to hundreds of thousands of Quicken Loans Arena customers annually.

And the greatest benefit of CAST’s facility fee plan is that it would shift the burden of maintaining the facilities back on to the owners who take hundreds of millions of dollars of profit from them. This was discussed recently by stadium-funding expert Neil deMause at his website Field of Schemes. As deMause explained, the team owners are already setting their prices as high as the market will bear, so “the most likely scenario” that would result from the implementation of a facility fee would be “that the Indians, Browns and Cavs would all cut ticket prices by [the amount of the fee] to keep maximizing the amount of revenue they get from ticket sales.” This is why, according to deMause and basic common sense, “virtually all economists count ticket taxes as part of a team owner’s contribution to a stadium project, even though it’s technically public tax money.” A facility fee “ultimately comes out of the owner’s pocket,” deMause says, making it “a great way for Cuyahoga County to live up to its lease commitment to fund upgrades to Cleveland’s sports facilities without hitting up local taxpayers.”

Which means that the “Keep Cleveland Strong” campaign got it exactly backwards with their press release in response, titled: “New tax proposal would punish Cuyahoga County families and sports fans, hurt city.” In this release, KCS called CAST’s proposal “terribly flawed,” a “peculiar idea,” the result of a “confusing thought process,” and “the latest in a steady stream of wobbly ideas,” that would “make it even more difficult for Cuyahoga County families to attend sporting events.” The release quoted a pair of County Councilmembers and Cleveland City Council President Kevin Kelley on the idea that a facility fee would “punish families.”

“[U]nder this deficient plan for a new tax, families would likely go to fewer games,” Kelley said.

“By pricing families out of games,” said County Councilman Pernel Jones, the proposal “puts jobs at risk.”

And County Council President C. Ellen Connally called the plan “a new, large tax that hits families the hardest.”

Nowhere in the KCS press release is there even a hint of the possibility that the facility fee plan would actually shift the burden for maintaining the facilities off of the public and back on to the sports team owners, let alone that “virtually all economists” believe that it would. Instead, the County’s elected officials and their corporate sponsors are trying to scare voters into believing the exact opposite is true, despite basic common sense and the opinions of “virtually all economists” to the contrary.

Which is all completely apart from the absurdity of the suggestion that a $3 facility fee would scare ticket buyers away when $5 sodas and $8 beers don’t.

CAST has identified a workable solution that, unlike the Sin Tax, would take the burden of maintaining the facilities off of taxpayers, and put it back onto the owners, helping to ease the pain inflicted by the lopsided owner-friendly leases that were signed back in the nineties. The County’s political and business leaders are not only refusing to consider it, they are aggressively distorting the truth about it to benefit a small fortunate handful at the expense of the great majority of their constituents.

The easiest way to understand this disconnect is as a case study on the inability of elected officials to stand up to the demands of moneyed interests in a system that’s abandoned all control on the influence of cash on government. The County’s politicians can’t afford to consider obviously preferable alternatives to the Sin Tax, because they know they need money from the corporations backing Issue 7 if they’re going to have any hope of staying in office.

Which also goes a long way to explain how Cleveland has become a city with more than half its children living in poverty, the second-worst public school system in the nation, third-world infant mortality rates, a vanishing middle class, and a City Council President who says with a straight face that voters should pass Issue 7 because it will “Keep Cleveland Strong” by “simply continu[ing] the system we have had in place for 24 years.

Rejecting Issue 7 is a small but sure way to demand better than this. That our politicians won’t require it makes it all the more important that voters do.


What it really means to say ‘Keep Cleveland Strong’

Art Modell Hostage Economics Do Not Keep Cleveland Strong


Pittsburgh Steelers to finance $40 million in stadium improvements without a dime of public money


In a piece on CAST’s facility fee proposal at the Plain Dealer, a newspaper that endorsed the Sin Tax before County Council even approved it for the ballot, columnist Mark Naymik also completely failed to consider the perspective, shared by “virtually all economists,” that a facility fee would “ultimately come out of the owners’ pockets.” Instead, Naymik parroted the Pro Sinners’ line that “a new facility fee will stress the very folks the anti-sin-tax coalition claims it is trying to protect.”


CAST hopes to hear shortly from “Keep Cleveland Strong,” Councilpersons Connally, Jones, and Kelley, and Mr. Naymik on their respective failures to consider the conclusion shared by “virtually all economists” that a facility fee would shift the burden of maintaining facilities back on to the team owners.


To stay updated on CAST and Issue 7, please join the CAST facebook group and follow CAST on Twitter at @noCLEsintax. CAST is registered with the Board of Elections and is accepting donations via PayPal.


  • Ed Carroll

    Thank you for being a voice on this issue, Peter.

    • Cleveland Frowns

      Thanks to you as well, Ed.

  • Cleveland Frowns

    Just because we are Anti Sin Tax here doesn’t mean we aren’t Pro Draft Party. I confirmed with Map Room over the weekend and we’re on for May 8 per usual terms, starting at 6PM. Will get a post up on it at some point this week, hopefully, but anyway, it’s on.

  • bupalos

    I read some milquetoastier version of the Strongheads argument here as a PD editorial or artitorial. It made me think it somewhat unfortunate that we the opposed offered any funding proposal at all. It assumes responsibility. Like “yeah, we admit we have to fund this, and that’s their solution and this is ours.” Then they can do this “family & jobs” demagoguery and the owners are nowhere to be seen.

    Maybe a way to have brought the owners back into the spotlight in which they belong would be suggesting solving the “problem” by selling these facilities (that the radio keeps swelling my civic pride by informing me are publically owned) to the tenant sports owners at a fantastically cheap rate. Because of our commitment to the Browns, Indians, and Cavs we’ll let them buy the whole house for just one week’s rent!! And they can do whatever they want as far as upgrades or whatever with all the rent money they’ll save!

    At least that kind of proposal might make for some education on the issue.

    • Cleveland Frowns

      Roldo has suggested many times that we sell the facilities to the owners for $1 each. I cited to his elegant proposal when I first wrote about this issue last year.

      Of course, the owners would never go for it because they make off much better with the public having the “responsibility” to maintain their facilities.

      Our facility fee proposal offers a real way to show that “responsibility” is something that cuts both ways. One of the most telling aspects of this debate is the way the Pro Sinners have framed it entirely in terms of the public’s “responsibilities” to the owners, without any allusion at all to the idea that the owners might have responsibilities to the public as well.

  • Eric

    I was going to skip this issue. While I am against the sin tax for a variety of reasons, I also didn’t want to give the City of Cleveland an excuse to either raise taxes or cut services further to fix the balance sheet should Issue 7 fail. I would love to see it come out of the owner’s pockets, but I believe they will ‘try’ to raise ticket prices first in a fit of self-righteousness before they give in and pay it themselves. Still, I’m voting against it now. Thanks Peter.

  • Joe Bialek

    This issue is the absurdity of absurdities. Let me get this straight: the purpose of the Sin Tax is to gouge those who purchase alcohol and cigarettes not because anyone is trying to discourage consumption but rather so the County can use that money to pay for sports stadiums that do not produce anything but a fleeting moment witnessing the passing of a football, the dribbling of a basketball and …the throwing of a baseball so that such a minute tidbit of diversion can be enjoyed by all. The stupidity of this proposition is enough to make your head spin even though the spin doctors advocating passage of this nonsense are already doing a pretty good job of hypnotizing the voters to actually consider supporting it. At least the Robber Barons of the previous centuries provided something tangible such as oil, steel, railroads etcetera. These team owners do not even provide one tangible thing that could ever be considered with the term “value added.” Almost everyone discusses this “enterprise” as though it is the same thing as industry {which it is not}. The price of admission is essentially a voluntary tax paid by those who can afford it to pay those who don’t need it. If this isn’t a transfer of wealth I don’t know what is.

    The real outrage here is the fact that taxes on alcohol and cigarettes will not be used to aid in the reduction of addiction {hence the reference to “sin”} but rather to stuff the pockets of all three teams who could easily afford to pay for the repairs themselves. The vote was rammed through the last time {under somewhat suspicious circumstances} and hear we go again. But this time…not so fast!!! We the voters of Cuyahoga County are going to fight the proponents on this one and we don’t care if the teams up and go somewhere else {please see my views on entertainment below} because quite frankly there are simply more important things than sports and the unearned money that comes with it. Those in public office who are too stupid and lazy to find other ways to grow a major American city need to resign and leave their self-seeking political ambitions on the scrapheap of history. Don’t ever let it be said that this was time when the tide ran out on Cuyahoga County but rather was the time when the voters rose up to welcome the rising tide of change and rebuked this pathetic paradigm our previous elected leaders embraced. Let the battle be joined.

    And now to the real underlying issue at hand:

    One of the most disturbing facts about our capitalist nation is the misappropriation of funds directed to the salaries of entertainers. Everyone should agree that the value an athlete, movie star, talk-show host, team-owner, etcetera brings to the average citizen is very small. Granted, they do offer a minuscule of diversion from our daily trials and tribulations as did the jesters in the king’s court during the middle ages. But to allow these entertainers to horde such great amounts of wealth at the expense of more benevolent societal programs is unacceptable. They do not provide a product or a service so why are they rewarded as such?

    Our society is also subjected to the “profound wisdom” of these people because it equates wealth with influence. Perhaps a solution to this problem and a alternative to defeated school levies, crumbling infrastructures, as well as all the programs established to help feed, clothe and shelter those who cannot help themselves would be to tax this undeserved wealth. Entertainers could keep 1% of the gross earnings reaped from their endeavor and 99% could be deposited into the public coffers.

    The old ideas of the redistribution of wealth have failed, and it is time to adapt to modern-day preferences. People put their money into entertainment above everything else; isn’t it time to tap that wealth? Does anyone think this will reduce the quality of entertainment? It seems to me that when entertainers received less income, the quality was much higher.

  • Hopwin

    I didn’t see in CASTs proposal how the monies would be divvied up. Does each venue simply keep the fees they collect or would the teams with the highest ticket sales be supporting the upkeep for those with the lowest?

    • Cleveland Frowns

      That issue is left open. Though there’s no agreement as to what Sin Tax revenue would be spent on if Issue 7 passes, anyway.

      • Hopwin

        The stadium upkeep is defined in the lease agreements. Setting the renewal of the Sin Tax aside as a bad idea though.
        What happens if ticket sales increase? Where does the extra revenue go?

        • Cleveland Frowns

          It wouldn’t be any different than if alcohol and cigarette sales were to increase if the Sin Tax was in place. It would go into a fund marked for stadium improvements. Also, to the extent that “stadium upkeep is defined in the lease agreements,” it’s only very loosely. Which is why the teams’ wish lists include scoreboard upgrades and faster escalators.

          • Hopwin

            I meant the annual monetary allotments are defined in the lease, not what that money can/will be spent on.

            The proposal as laid out above has a lot unanswered questions and holes and might be better received were it more fleshed out. For example your point about increased revenue from more cigarettes/tobacco sales must be addressed in the existing tax code so you should steal that language and attach it to your proposal. Personally, I’d prefer it if you matched the language about current allotments from the existing sin tax ($1.2M for upkeep/blah/blah/blah) with any excess collected tax revenue being returned to the Cuyahoga general fund.

          • Cleveland Frowns

            The proposal as laid out above is of course not in the form of finalized legislation but it is 100% feasible in substance.

  • Cleveland Frowns

    “When the preferences of economic elites and the stands of organized interest groups are controlled for, the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy.”

  • Cleveland Frowns

    “The pro-sin tax campaign’s instantaneous and over-the-top attack on the “FairShare” proposal made by the grassroots anti-sin tax coalition — to raise the money via a $3.25 facility fee on each sports event ticket instead of a sin tax — and refusal to consider it at all is interesting because it’s so out of proportion to a reasonable proposal made by a group with much less money, media, and power than the renewal campaign. They resorted to falsehoods, exaggerations, and ad hominem attacks. Why?”

  • George

    After you win, do you plan to propose city council reinstitute the sin tax to provide for the schools? The public tolerates the tax, but clearly the current use of the tax dollars is wrong.

  • rgrunds

    Finally, you wrote a responsible analysis. I really agree with you. I actually wrote a book about the defects of elected judiciaries. Nice work, Bunkie.

  • Sherrie Noble

    Good analysis. One question: has anyone done the metrics on the actual economic benefit to the city the teams create justifying any tax dollars to the facilities? Just might be inteesting to toss into the mix. I hae heard all sorts of prospective claims but nothing with hard numbers based on past performance with true cost/benefit analysis.

    I am involved in the baseball team name/logo fight, which even has relefvance here in the tax issue. One argument i have not yet made but rings true is that the city itself is supporting racism by paying for upkeep at Progressive Field. The definition of racism which seems most on point is the idea of single group superior or inferior status in contrast to another group or groups based on race. Both the name, arbitrarily and wrongly coming from Columbus and the ridiculous character Wahoo clearly fit this picture. Mayor Jackson, are you listening? President Kelley? After the Opening Day picture that went round the world I would guess there are those who will hear this position and take it seriously. Does Cleveland rally want that particular fight? Do the teams or the MLB? An American city supporting racism in the 21st century–is that really what Cleveland and America are about? I certainly hope not but…..

    It may be that the team owners are deliberately keeping the city in the mix for personal as well as economic reasons. They can hide their opinions and positions, their reasons for those positions, even if they are as minor as peer group social pressure perhaps, deeply behind the politicians they have put in office.

    In any case let the burden of maintaining the facilities fall upon those who use them and those who profit from them. I do like the idea of the increase of a sin tax being used for the schools but wasn’t that what the lottery was designed for?

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