The rules committee of the Indianapolis-Marion County City-County Council last week approved a 1% increase in its hotel and motel tax — giving Indianapolis the highest hotel tax rate in the country — in order to fund the cash-strapped Capital Improvement Board.

The full City-County Council will vote on the measure Aug. 10. 

The tax increase is part of a package of bills passed by the Indiana General Assembly during its recent special session to keep the CIB afloat. The board runs the city’s sports venues and its convention center.

The council must approve the tax increase by Sept. 1 or the board will lose out on loans that are part of the legislative package. Also under the state plan, the CIB would be merged with the Marion County Building Authority.

By pushing the city’s hotel and motel tax to 10% from 9%, officials hope to plug a $20 million deficit and raise more operating revenue for the CIB. Officials have said they need the money to cover the costs of operating the convention center, the one-year-old Lucas Oil Stadium, and the Conseco Fieldhouse.

The tax increase is expected to generate about $4 million annually.

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