Indiana Eco-Devo Groups: The Issue is Transparency

October 25, 2012

by David Penticuff

The daily newspaper I edit has decided to pursued a formal complaint against the local “growth council,” a quasi-official economic-development group similar to many in Indiana. It wasn’t an easy decision, forcing our management to defend the newspaper against charges it was against investment and progress. But it came down to an obvious matter of simply doing our jobs as Indiana journalists.

At the heart of the complaint, denied recently by the office of the Indiana Public Access Counselor, was that the growth council maintains it is a private group yet receives a direct draw of county tax money while keeping its records closed on how that money is spent.

We still know of no good reason such records should be closed.

In May, we met with the executive committee of this economic-development group. It is made up of businessmen and academics in the community as well as a number of elected officials who serve on its larger board. We expressed our concern that the organization receives considerable tax money, almost $300,000 annually, while no one from the State Board of Accounts down to the county council keeps tabs on how that money is being spent.

In 2009, our county council set aside .03 percent of its Economic Development Income Tax for the growth council, money now received as automatically as if it were the sheriff’s department or the county highway garage. The exception is that those public departments must make their spending public upon request.

The executive leadership of the growth council, however, has rebuffed my newspaper’s repeated requests that records be opened. They say it is the way potential employers want things done — that and the group was formed as a private nonprofit, which they maintain it is still.

We think, however, once an organization manages to have a piece of the local income tax rate dedicated to it, it gives up the right to keep taxpayers out of their meetings and record books unless there are specific reasons under law to exclude the public.

That’s just how tax money is supposed to be treated. The growth council needs to be accountable to its members and to the public that now funds it directly. To say it is OK that they are not accountable is to admit that we as a community have installed a class of people who may simply do as they please, when they please, with other people’s precious resources.

We know that this situation is not right, and we suspect that it is not legal under Indiana law.

To those who ask if we think there has been abuse of funds at our growth council, we can say that we have no reason to think so. But we also must say that there is currently no way to objectively determine if the spending is proper or not.

Such is not acceptable and should have been a concern of the county council and those who set up the EDIT three years ago.

The State Board of Accounts last audited our local growth council in 2007 — before it began receiving EDIT money directly. The growth council files an annual document (an E-1 form) showing the percentages of public versus private money disbursed by the growth council. This consistently shows that public money disbursements amount to less that half of the total yearly disbursements — in which case the state does no audit.

The growth council’s executive director says both private and public monies are kept in “one pot,” however, and there is no separate tracking of public and private funding. We don’t know how the growth council could report such percentages of private versus public spending to the state when the money is not kept separate.

Sen. Jim Banks, R-Columbia City, says he is considering legislation to make local economic-development agencies more transparent. We wish him good fortune in that effort.

We also wish good fortune to our growth council, of which my newspaper is a member. We might not always agree with its leadership on the best way to build our community, but at heart we have the same goals for our city and county.

The first step they could take in making our community better is simply opening their financial books.

David Penticuff is editor of the Chronicle-Tribune in Marion. His essay was revised from an Oct. 21 editorial at the request of the Indiana Policy Review Foundation.


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