Should more state taxes go toward MLS stadium? $2B revenue shortfall paused those talks
Indianapolis could have secured more state tax dollars to attract a future Major League Soccer stadium and team during this legislative session, if not for the disappointing revenue forecast that projected $2 billion less in state revenue than anticipated over the next two years.
There were discussions about inserting into the state budget bill language that would allow more tax dollars collected nearby to go toward construction costs of such a stadium. Once the revenue forecast hit, it no longer seemed like quite the right time to do that, and that idea was temporarily tabled, according to a person familiar with the discussions.
This has little to no bearing on the future MLS prospects for the capital city ― those talks are very much alive, and there's plenty of time to make such a change ― but it's one of many consequences of the vast revenue shortfall, among other cuts. The talks also provides a clue into what greater state involvement in the quest for a state MLS team could look like, since the request could come back in the future.
"The opportunity for Indianapolis to secure a Major League Soccer club remains promising," Mayor Joe Hogsett said in a statement to IndyStar. "The city is engaged in ongoing conversations with MLS and Commissioner Don Garber, and is actively working with business and civic leaders to position Indianapolis as the next MLS city, further boosting our reputation as a global sports capital."
MLS prospects have been the subject of intrigue in Indianapolis since last summer, when the MLS commissioner said Indianapolis was doing "all the right things" to acquire a team. There's still no timeline on if or when the MLS plans to add another franchise or relocate a team; an ownership group has not yet gone public, though the Simon family might be involved. Adding to the intrigue this year, Commissioner Don Garber came to town in February to meet with Gov. Mike Braun.
State lawmakers created the pathway to finance a new downtown sports stadium, originally with a minor league soccer stadium in mind, in 2019. The mechanism was called a Professional Sports Development Area, a taxing district that could capture new state and local sales and income taxes generated in a one-mile radius to put toward paying off the cost of building the stadium.
More: Indiana lawmakers passed the state budget over night. Here are the biggest winners and losers
A stipulation in that bill capped the amount of state taxes that could go toward the construction costs at $9.5 million a year. That was the cap being discussed during this legislative session, given that a major league stadium would likely cost far more than a minor league stadium.
The State Budget Committee has yet to approve the financing for a potential MLS stadium. Removing the cap might have provided some more flexibility with a financing plan.
But an MLS stadium is still years away from being reality, so the legislature will have more opportunities in the future to consider this proposal.
A spokesperson for Sen. Ryan Mishler, R-Mishawaka, the top budget writer in the Senate, said he is "unable to comment." The House budget writer, Rep. Jeff Thompson of Lizton, did not respond to a request for comment.
Contact IndyStar state government and politics reporter Kayla Dwyer at kdwyer@indystar.com or follow her on X @kayla_dwyer17.
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