The Journal Gazette
Thursday, December 02, 2021 1:00 am


Business plan

Taxpayers deserve greater accountability from state's development efforts

EDITORIAL BOARD | The Journal Gazette

In 2004, priority No. 1 for gubernatorial candidate Mitch Daniels was an overhaul of the state's economic development structure: “Every day counts when you have as far to come back as Indiana,” he said at the time. “The Indiana Department of Commerce has failed badly in its mission.”

Once elected, Daniels' restructuring plan was fast-tracked by the General Assembly, abolishing the commerce department and replacing it with a 12-member Indiana Economic Development Commission headed by the governor.

Today, as The Journal Gazette's Niki Kelly reported Sunday, the quasi-public Indiana Economic Development Corp. is again evolving, under a new secretary of commerce and five vice presidents.

“It's a new administration, so there's a new vision,” David Rosenberg, executive vice president, told Kelly. “As we have looked at it, the Indiana (gross domestic product) has underperformed the U.S. GDP 50% of the time over the last five decades. So, we are looking at how to be more aggressive as we move into this new economy.”

After nearly 17 years, the economic development corporation is now turning to a “5Es” strategy. Here's hoping it will finally produce improvements to the system Daniels targeted in 2004, and that it will begin to operate with more transparency. The agency has been lacking on that point from the start.

• When the initial legislation creating the public-private commission was introduced in 2004, Democrats – who then held enough seats to have a voice in the process – demanded an amendment to make the commission subject to the state's open records law.

• A 2012 TV news investigation reported about 40% of the more than 100,000 jobs promoted by state officials from 2005 to 2010 never materialized, but the economic development agency would not disclose which companies failed to meet commitments. In response, Senate Republicans led the push for a law requiring the economic development corporation to provide information on incentive agreements between private companies and the agency.

• An Indianapolis Star investigation in 2013 found Elevate Ventures, hired to manage tasks formerly handled by IEDC staff, had steered $800,000 to firms owned by the company's chairman and his son. Federal auditors determined the state misused funds in exercising little oversight over the work. Indiana repaid the federal job funds, with interest.

• When the state teamed up with the city of Indianapolis to bid on Amazon's highly sought-after second headquarters in 2017, the economic development corporation refused to disclose the amount of incentives offered, even though other states and cities disclosed their bids. Earlier this year, an appeals court ruled the information did not have to be disclosed until later in the process. Tax Analysts, the plaintiff in the lawsuit, reported a separate bid for HQ2 by the city of Gary and the IEDC was for as much as $3.2 billion in incentives.

Early indications suggest the Indiana Economic Development Corp. won't be more forthcoming under new Secretary of Commerce Brad Chambers. He declined Kelly's request to talk about the corporation's new strategic plan but eventually made Rosenberg available for comment. The agency's 5E plan targets “environment,” or quality of place, “economy of the future,” entrepreneurship, energy and external engagement.

With reorganization, it's difficult to determine whether personnel costs at the agency are higher or lower. Chambers is accepting a salary of just 99 cents a year, but he did not divest in his personal business interests. His predecessor, James Schellinger, earned $220,000 a year.

A separate IEDC Foundation, funded by private contributions, covers some economic development activities, including Gov. Eric Holcomb's trip to Qatar in July.

Perhaps changes at the Indiana Economic Development Corp. will finally kickstart the sluggish half-century of economic growth noted by Rosenberg. But the changes should include greater transparency to ensure Hoosiers are well served. For 17 years, it's been too difficult to track efforts, money and results.

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