Backgrounder: Stretching the Meaning of ‘Economic Development’

March 20, 2017

by Fred McCarthy

The headline on a recent article out of Indianapolis says, “Council Panel OKs $148K to Fund ‘Economic Recovery Coordinator.'” The text tells us that the city council’s Metropolitan and Economic Development Corp. there approved $147,916 (for “salary and some basic administrative costs”) to fund the first year of the three-year contract position.

This is to be an individual to help workers laid off to “move on to new employment.” It specifically refers to “workers affected by impending layoffs at Carrier Corp. and Rexnord Corp.” The position is referred to as a “contracted hire through Develop Indy.” The individual will not be a city employee, the article says. Rather, the position will “work ‘collaboratively with the Indy Chamber, companies, workforce development partners and the city.’”

In sum, the wording would indicate that the individual will operate as an entity being paid by Develop Indy with tax dollars from the city, in expectation of cooperation from all concerned.

Several questions come to mind. Who came up with the idea in the first place? Did the Chamber of Commerce ask for additional help? Did the Chamber suggest a contractual arrangement rather than an employee? If so, why? How was the amount of money estimated down to the last $16?

We are told by a spokesman for the Indianapolis mayor that Develop Indy has the discretion to set the salary level of this position. Does that also apply to operating costs spent by the individual? It would be interesting to know how many other Chamber employees and programs are being paid by taxpayers.

This proposal would seem to indicate, unfortunately, just how far the term “economic development” can be stretched. Develop Indy is described as “the local economic development organization for the county.” (Our emphasis.) As a “part of the Chamber,” is it a private parallel to the Metropolitan Development Commission (MDC)? If so, why is the new tax-funded position not simply a city employee?

Then we read that this individual “will also work on revitalizing former industrial cites, facilities and corridors in order to attract and grow a more robust manufacturing sector.” We were under the impression that this sort of thing has been a basic, decades-long, priority program under the MDC for multiple mayors.

Finally, we are offered a little reassurance on future funding, being told that eventually 80 percent of the dollars will come, apparently, from that great Free Money Giver in the East.

A Chamber of Commerce used to be — and may still be in some places — a voluntary organization of businessmen working for the good of their community. It was never intended to be, and should not be, an arm of government financed with tax dollars.

Fred McCarthy, an adjunct scholar of the Indiana Policy Review Foundation, represented various taxpayer and business organizations before the Indiana General Assembly for 40 years, being awarded a Sagamore of the Wabash by two governors along the way.


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