The Outstater
‘Infrastructure’ Is an Open Spigot
DR. MARYANN O. KEATING, author of the cover article for the current issue of The Indiana Policy Review, is an expert on the economics of infrastructure. Even she was surprised, though, to learn that some Indiana cities don’t prioritize or even coherently define infrastructure in their spending.
A real-time example crossed our desk this week — too late, unfortunately, to accompany the Keating article but one that illustrates her points.
In lopsided votes, both Fort Wayne and Allen County approved a combined $4 million gift — and that is the correct word — to a smallish national business (400 employees). The money was needed, the company president said, to relocate six miles across town to new office space.
Those dollars came from budget categories that could have been used for traditional infrastructure projects, sidewalk repairs and such. And as one of only three dissenting councilmen put it, “If we help each and every business move into a new office there won’t be much left for roads.”
There’s more . . .
- The new space not so coincidentally is in a controversial downtown renovation project, one made possible by politically driven grants, bond arrangements and special considerations ($300 million for its first phase).
- As such, the developers were largely paid up front and had no need to market test the project. Leasing the space, therefore, has become a challenge, one with a political aspect to it.
- The company receiving the $4 million moving grant had already signed a lease benefitting from a rate partly subsidized by taxpayers.
- Nonetheless, supporters intimated that if the $4 million were not forthcoming the company might break its lease — a risk, it was said, that the community could not afford to take.
- And just so you don’t confuse this with the run-of-the-mill corruption, know that three of four likely candidates for mayor were involved in the decision, two of them Republican.
- None of the three asked why we would spend so much money to help a company willing to casually break contracts or one that after signing a lease feigned surprise to learn there would be moving costs.
In sum, our local politicians, instead of doing the mundane work of municipal government, chose to elevate themselves to full partners in what they viewed as a glamorous commercial venture. And in doing so, they threw out the cautions and warnings of Dr. Keating and so many others.
We are left to repeat one of our favorite public policy observations. It comes not from an expert or even an academic, although it strongly supports their research. It is from a regular businessmen, one of the fellows leaned upon to finance this economic-development circus:
“If our politicians are going to pretend to be developers, we’re going to have to elect smarter politicians.” — tcl
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