Sin tax final score: Sports and money 56, frugal populists 44

For Clevelanders who follow politics, today’s the aftermath of a major conflict.

Nearly the entire political and business establishment lined up to support Issue 7, the alcohol and cigarettes tax for stadium renovations. A scrappy coalition of activists opposed it with a ferocity that had nothing to do with spending 7 1/2 more cents on a six-pack of beer.

The final score: Issue 7 passed, 56 percent to 44 percent. What’s that mean, beyond the price of a cigarette pack or a scoreboard? A lot. Here are a few keys to understanding the vote.

It’s a sports town. Someone recently wrote that losing the Browns in 1995 wounded Cleveland as badly as losing the Dodgers did Brooklyn. It’s true. For many Clevelanders, the sports teams make up a huge part of the city’s identity.

The major leagues drive hard bargains with cities. The public cost of owning Progressive Field, Quicken Loans Arena and FirstEnergy Stadium is going above $1 billion with this vote – to $1.2 billion from 1990 through 2035, Cleveland Magazine has calculated. Yet, we learned yesterday, a majority in Cuyahoga County is willing to pay it.

The frugal populists revolt. A lot of people in Cuyahoga County – about 44 percent of people, it turns out – think it’s unfair, outrageous, and illegitimate to spend tax money to build and renovate sports stadiums. Issue 7 gave a new generation a chance to join a rematch of the May 1990 vote on Gateway, which realigned local politics in ways that still resonate.

Many sin tax opponents weren’t just resisting the great expense of being a sports team’s landlord. They were frugal populists who treated Issue 7 as a vote on the entire Cleveland political system, especially the alliance of government and business.

The best way to understand most Cleveland political debates isn’t party politics. It’s, do you believe in spending tax money on “public-private partnerships” that draw people and business downtown? Or do you thinks that’s corporate welfare, giveaway of money better spent on other needs? That debate has run through our politics for decades, from tax abatement in the ’80s through Gateway in 1990 through the convention center debate in 2007, to the sin tax rematch yesterday. (For more on this great divide, check out my commentary after George Voinovich retired – the conflict traces back at least to his years as mayor.)

Populism declines in City Hall. Plenty of voters may have wanted to pressure the sports teams for a better deal, but almost no politicians did. Some were pragmatic, believing the city and county had little leverage to reopen lease negotiations midway through a binding contract. For instance, Mayor Frank Jackson voted against the stadium leases in the ’90s as a city council member, but felt bound to honor them as mayor.

Still, the near-unanimous support for Issue 7 among city and county officials reflects a political realignment. There aren’t many Dennis Kucinich-style leaders, ready to fight big business, in Cleveland politics anymore.

Money talks. Of course money affects elections. And the business-political alliance will always outspend the frugal populists. Issue 7 supporters spent more than $1 million, mostly from the teams, to get their message out. Polls suggest that helped sway undecided voters and turn the election around. Opponents had much less to spend.

What now? The debate about public stadium spending isn’t over. For one thing, the city and county have no agreement on how to split up the new sin tax money. I asked city council president Kevin Kelley about that on WCPN this morning, and he couldn’t say how it’ll be resolved.

The city and teams would like an even three-way split of the funds. But the county council isn’t inclined to do that. It may keep control of the sin tax funds and force the city to come to it, hat in hand, every time FirstEnergy Stadium needs repairs. Or, the city and county may negotiate a cooperative agreement on how to split the money, maybe with some new committee deciding how to set priorities.

I wouldn’t even be terribly surprised to see the Gateway board take over FirstEnergy Stadium. Gateway already has a system for comparing and prioritizing repairs at Progressive Field and Quicken Loans Arena. So why not bring the football stadium under that system, once the funding source is the same?

Whoever’s in charge of spending the stadium tax money will have an important job. They’ll have to manage the teams’ renovation requests so the costs don’t exceed the projected $260 million tax revenue. If the anti-sin tax crowd wants to stay engaged, it has plenty to watch and probe.

FitzGerald argues Dolan should bow out of major downtown development decisions

This weekend, Ed FitzGerald e-mailed me his letter to the Ohio Ethics Commission about Matt Dolan’s conflict of interest with the Indians. It argues that if Dolan is elected county executive, he should have to bow out of any decisions about the casino, the RTA, Public Square, or roads, bridges, or sewers downtown -- because they all “directly and uniquely impact the Cleveland Indians.”

The casino because it’ll be a block or two from the stadium, I assume. But the RTA? Because people take the Rapid to ball games, I guess?

Dolan told me last week that if he’s elected county executive, he’ll let the county council president take the lead on Indians matters and Gateway appointments. He asked the Ethics Commission to give him advice on his plans.

But FitzGerald, his main opponent, is pushing the commission to go way farther than that. He also wants it to rule on whether Dolan should return the huge campaign contributions from his father, Indians owner Larry Dolan, “to avoid even the appearance of impropriety.” FitzGerald’s letter, written Oct. 8, pegs the elder Dolan’s contribution at $280,000. On Thursday, we learned Larry Dolan’s now given a total of $630,000.

The Ethics Commission isn’t answering Dolan’s request until after the election. No wonder: It’ll also have to deal FitzGerald’s letter, which reads more like a political argument than a request for a legal opinion. At one point FitzGerald talks about “an assessment of the appropriateness of Mr. Dolan’s candidacy and potential service as County Executive.” That’s up to the voters, not the Ethics Commission.

But politically, FitzGerald’s playing an interesting card here. He’s saying taxpayers should trust him, not Dolan, to represent their interests on downtown development issues. He’s trying to tap into the mistrust of sports teams’ political influence in Cleveland, a concern that dates back at least to the Gateway project. And he’s again reminding voters that Dolan’s millionaire family is funding the TV attacks against him.

To read FitzGerald’s letter to the Ethics Commission, click here. To read Dolan’s letter, click here.

Dolan's Indians dilemma: How he'd avoid conflicts

I called Matt Dolan this week to ask him something I've wondered about for a while -- how he'll avoid dealing with the Cleveland Indians if he's elected county executive.

"If the Indians are involved," Dolan told me, "there will be program in place so I’m not involved in any decision-making." He says he'd ask the county council president to take the lead.

Dolan -- whose father, Larry Dolan, is the Indians' owner -- first addressed the issue this summer. It's a touchy subject, since Dolan's family is donating $1 million to his campaign. His main opponent, Ed FitzGerald, has needled him for the conflict of interest.

The thorniest challenge: The county executive will appoint three out of five board members of the Gateway Economic Development Corp., the Indians' and Cavs' landlord. Dolan wrote to the Ohio Ethics Commission on Sept. 27, asking for an advisory opinion on his plan to recuse himself from that decision. (To read a copy of his letter, click here.)

So I asked Dolan, how can an executive recuse himself from making an appointment? He said he'd pass the decision on to the county council president and a bipartisan advisory panel.

The panel is an idea he proposed in April. It would help the executive choose potential members for dozens of appointed boards and commissions. (See this page of his website.) "They would submit recommendations of who they’ve screened," Dolan said.

"For the Gateway appointment, they would submit it directly to the council president. The council president would make the appointment to council." Then council could approve or reject the person.

Dolan's answer fits what Jennifer Hardin, chief advisory attorney for the Ohio Ethics Commission, told me when I asked how other government executives recuse themselves from appointing someone.

"In most cases, where there are several branches of government involved, another branch may be able to substitute," Hardin said.

What about other decisions the county executive might have to make about the Indians? Say, if the Indians ask for money to renovate Progressive Field?

"If there's a scenario in which the Indians make a request on Gateway," Dolan said, "then the Gateway folks will be instructed to work directly with the council president." No such scenario has come up in the 11 years his family has owned the team, he added.

But the Indians began exploring possible upgrades to Progressive Field in May. The team's lease says Gateway has to pay for any "major" capital repairs costing more than $500,000. But Gateway is not flush with cash, so the team might ask the county and city, which control Gateway, to pay.

"I don't speak for the Indians," says Dolan. "They’re talking about doing renovations. There's no indication at all how Indians intend to finance it. My opponents just assume the county is going to pay for it. That's not accurate."

In 2006, the Cavaliers briefly floated the idea of having taxpayers spend $30 million to renovate Quicken Loans Arena. It fell to Jimmy Dimora, as a county commissioner, to shoot the idea down.

But the mayor of Cleveland would probably take the lead in dealing with any major renovations to the baseball stadium. Under Gateway's structure, the city is the contact for Progressive Field, Dolan notes, while the county is the contact for The Q.

Dolan's letter to the Ethics Commission asks for "a timely response," since "we are drawing constantly closer to the end of campaign season." But Hardin says the ethics commission won't respond until November or December, if Dolan wins.

Dolan's letter asks if recusing himself would be legal. But he says voters shouldn't be concerned that he won't get an answer by Nov. 2. He says he phrased the letter that way because having an advisory opinion backing him up would protect the county in case anyone filed a taxpayer's lawsuit to challenge a Gateway appointment.

"I’m doing the appropriate steps leaders do to prevent any problem in the future," he said.

To read my coverage of the county executive race in Cleveland Magazine, including pieces on the leading candidates, click here.

Dolan, FitzGerald exchange punches over corruption, family ties

Matt Dolan and Ed FitzGerald think they've found each others' weak spots.

Dolan's on the air with an attack ad that tries to tie FitzGerald, the Democratic front-runner for county executive, to the county corruption scandal.



Dolan's ad notes FitzGerald got campaign contributions from several figures in the scandal -- a fact first reported on this blog and in Cleveland Magazine's September-issue coverage of the county executive race. It doesn't say FitzGerald has given most of that money to charity. It cites FitzGerald's cameo appearance as PO14 in Dimora's indictment and slams him for opposing the new county charter.

FitzGerald has put out his own ad touting his anti-corruption bona fides as a former FBI agent.



He's also punching back. This morning he's holding a press conference at the county administration building, attacking Dolan, his Republican opponent, for a conflict of interest. Dolan's father owns the Indians, yet as county executive, Dolan would have to appoint members of the Gateway board, which oversees Progressive Field. From FitzGerald's press release:

Dolan has described his personal financial interest as being a "beneficiary to a trust" that owns a portion of the Cleveland Indians. The new County Executive will be involved in appointing 3 of the 5 members of the Gateway Economic Development Corporation, the landlord for the Indians and the Cavs. Gateway sets financial terms with the sports teams, often involving large sums of money. ... In addition, candidate Dolan has received $430,000 in campaign contributions from his father Larry, owner of the Indians, and uncle Charles Dolan.

Dolan has asked the Ohio Ethics Commission to offer advice on the Gateway issue. He's also said he'd recuse himself from Indians-related matters (which might not be easy). {Update, 10/20: Here's my new post about how Dolan says he'd handle this.} He went online Tuesday with a letter defending his family's donations to him.