Date: December 05, 2024
Source: Crain’s Cleveland Business editorial board
Abstract:
Sin isn’t what it used to be — at least when it comes to paying for stadiums and arenas.
It’s creating some financial challenges for Cleveland and Cuyahoga County that cry out for a fresh approach to making sure the sports facilities are maintained properly, without compromising the ability to support vital services and public spaces for taxpayers.
Both Cuyahoga County Council and Cleveland City Council this week approved measures to pay off the nonprofit Gateway Economic Development Corp.‘s debt to the Cleveland Cavaliers and Cleveland Guardians for more than $40 million in repairs at Rocket Mortgage FieldHouse and Progressive Field, respectively…
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The timeframe is different, but the principle is the same when it comes to the tax used to fund nonprofits arts and culture organizations in Cuyahoga County.
About 70% of county voters last month approved a big increase in the tax, which was set to expire in 2027. (This tax is separate from the sin tax on alcohol and cigarettes that funded the construction of the Gateway sports complexes.) Voters initially passed the 30-cent-per-pack tax in 2006, and it has done its job, generating a total of about $250 million since then, about 95% of which is distributed as grants by Cuyahoga Arts & Culture (CAC).
The tax, though, was generating about half of what it used to produce as fewer people smoke. The increase voters approved on Nov. 5 raises the tax to 70 cents per pack and, as CAC executive director Jill Paulsen said in the wake of the vote, “extends the feasibility to make grants until 2035.”
That’s a good thing. An economic and social impact study conducted in 2023 by the nonprofit Americans for the Arts found that Cuyahoga County’s nonprofit arts and culture industry generated a little more than $533 million in economic activity in 2022. These kinds of studies can be self-serving and are better seen as estimates than precision measurements, but there’s little doubt that the arts and culture sector is vital to the economy and the quality of life of this region.
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