Backgrounder: Indy vs. Oklahoma City

December 21, 2015

by Craig Ladwig

The fellow at the next desk loved to tell about his first assignment in a little river town founded as the disembarkation point for prostitutes, gamblers and pickpockets kicked off the steamboats. The town still had an edge, he said.

Some of us prefer cities founded along ports and rivers, cities with magical, freewheeling, creative, rough-and-tumble mixings of humanity, cities whose very geographic location tells a story — Fort Wayne, Evansville, Jeffersonville, New Albany and dozens more along historic waterways like the Ohio, the Wabash, the St. Joseph and such.

Indianapolis is a wide spot in a cornfield, There is no “there” there, to borrow from Gertrude Stein, nothing spontaneous. The government does all the creating — official state buildings, garish war memorials, heavily subsidized sports venues, contrived commercial activity all held aloft by a boosterish, unquestioning local media.

Too much of this is done with statist magic — huge state office complexes, grants from the legislature, unexamined tax-secured bonding, temporary taxes that continue forever, one-sided abatements, tax increment financing and machinations in general that risk ruin for a future generation.

But when we outstaters travel to Indianapolis it is for the shopping along 82nd Street and Keystone, places in which government planners, affiliated politicians, connected lawyers and financiers have had little involvement.

The major export is self-satisfied Republicans lecturing the rest of us on public policy, particularly city-county consolidation. They imagine their “Unigov” is a national model. In fact, as our Dr. Sam Staley noted in a report to the legislature, it only consolidated a small part of government back in 1970, those departments with few employees. Modern Indianapolis can as easily be attributed to its accidental position as one of the largest of the relatively homogeneous cities suitable for corporate relocation after the 1960s race riots.

“There is nothing remotely conservative about the Marion County Republican Organization,” our friend Tom Huston wrote recently. “It exists to serve the interests of the lobbyists and manipulators and seeks to punish honest conservatives. The corruption of the party is so corrosive that otherwise honest people just take it for granted that this is the way politics works.”

Twenty or so years ago Indianapolis won a competition with Oklahoma City for a United Airlines maintenance hub. The Indianapolis “quality of life” was credited. Even so, our foundation argued at the time that the deal Mayor William Hudnut and other progressive Republicans struck with United was politically motivated, foolishly executed and expensive.

We noted that there was no reference to a minimum-average salary in the contract. The mayor’s promise that in return for the city’s contribution the facility would employ specific numbers was hollow. In case of default, the deal he signed allowed United to avoid penalty by counting any net new employees anywhere in the state, plus any “ancillary” ones who might be employed by a new business even vaguely connected with the company.

And default it did. United Airlines executives had said they couldn’t see themselves living in Oklahoma City regardless of financial incentives. The real reason turned out to be that Indianapolis made the better patsy. The city lost an estimated $523 million.

In the years since, Indianapolis has continued to congratulate itself on its heavily taxed and bonded quality of life. Oklahoma City, on the other hand, has developed a unique pay-as-you-go financing structure, setting a national standard for innovative and fiscally conservative governance.

“Its particular funding mechanism is debt-free,” Aaron Renn wrote of Oklahoma City in the current issue of City Journal. “The program also includes a citizens’ oversight committee, and the money from the special sales tax is kept separate from the city’s general fund, reducing the potential for political mischief.”

To add insult to injury, the magazine compares Oklahoma City to what Indianapolis once was — when Mayor Stephen Goldsmith focused on delivering better public service rather than ribbon-cutting. “That’s a message Republicans might need to recapture if they want to increase their limited appeal in urban America,” it concluded.

Yes, Oklahoma City lacks a navigable river. It might be able to buy one, though — cash on the barrel head.

Craig Ladwig is editor of the quarterly Indiana Policy Review.



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