Indiana Eco-Devo: Progress with Transparency

December 30, 2012

For release Dec. 30 and thereafter.

by David Penticuff

Some of us are pleased that the upcoming session of the Indiana General Assembly will include a serious attempt at reforming the way economic-development efforts are conducted in the name of Indiana taxpayers. Sen. Mike Delph, R-Carmel, is working with Sen. Jim Banks, R-Columbia City, to develop legislation that would compel the Indiana Economic Development Corporation (IEDC) to actually report on how many jobs are created by their efforts, not just promised at press conferences.

Senator Banks, with the support of senator Delph, is developing language for the bill that would open up local economic development groups, often private by way of nonprofit status, to public inspection of how they spend public dollars.This is simple good government. The IEDC and local economic-development groups are not conducting clandestine operations for national security; they are trying to lure capitalists to town. We need to be able to follow our tax dollars with the public invited along and make a judgment on whether those dollars are used wisely by those spending them. In Iowa, the state economic-development organization holds a public hearing on proposed development deals – including incentives – before matters are finalized and elected officials pat themselves on the back for “creating jobs.” Maybe something like that could work here. Tad DeHaven is a former fiscal watchdog in the Mitch Daniels administration who is now a budget analyst with the Cato Institute and an adjunct scholar of the Indiana Policy Review Foundation. He recalls trying to hold the IEDC accountable for reaching efficiency goals that other state agencies had to meet, but there really weren’t any.He said the IEDC was mostly a political apparatus designed to give incentives and produce events at which politicians could claim economic victory by making job announcements. It really wasn’t about developing an environment for business expansion.

Mr. DeHaven obtained a 2009 email exchange between a former head of the IEDC and a commissioner of Indiana Workforce Development. It was in response to concerns by the mayor of Kokomo that the IEDC was primarily concerned with bringing jobs to Indianapolis. “I assured him that wasn’t the case and explained that most employers come to IEDC already knowing where they want to locate,” the IEDC director wrote.

Well, if employers already know where they want to be, why are we paying for incentives to attract them to where they already intend to locate?

Reform legislation is drawing the support of Democrats and Republicans with both labor union and Tea Party backing. It is bipartisan, and it is an obvious good idea.

Clearly, what has been done the past couple of decades in taxpayer-funded and government-driven economic development isn’t working across the state, and a new approach, or at least a less-expensive one, needs to be tried. But we can’t make those public-policy decisions unless we, all of us who have an interest, truly know what we are doing now and what results are being generated.

David Penticuff is editor of the Marion Chronicle-Tribune. This essay is excerpted from a Dec. 30, 2012, editorial.



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