By Dave Evensen
The Republic
The economic cost of Muscatatuck State Developmental Center’s closure can be measured in millions of dollars and hundreds of jobs lost.
The closing also is partly responsible for an upcoming, estimated $60 increase in property tax bills for the average Jennings County household in 2005.
The problem, according to officials, is that an employer as large as Muscatatuck, which employed more than 1,100 in 2001, is linked to the surrounding community on several levels.
Local companies worked with Muscatatuck. The center’s employees spent their income on local businesses, which turned around and spent the money again.
So when Muscatatuck falls, a lot falls with it.
In October 2003 the consultant firm Crowe Chizek and Co. released an economic impact study that said Muscatatuck employees living in Jennings, Bartholomew, Jackson, Jefferson and Ripley counties earned more than $25 million in 2001.
The loss of this income, along with the loss of millions of dollars per year the center spent on local contractors, more than $12.2 million in 2001, has an added ripple effect, the consultants said.
The firm calculated that the total secondary economic loss, including lost output and earnings, would exceed $55.3 million.
About 1,550 jobs would be lost due to the closing, Crowe Chizek estimated, including more than 470 indirectly linked to Muscatatuck’s fate.
Auditor Ed Judd said the shutdown has already been felt in county coffers. Jennings County has lost about $600,000 in income taxes since the center announced in 2001 that it will close, he said.
The county is projected to collect $1,780,000 in county adjusted gross income taxes and county economic development income taxes in 2005.
The income tax collections peaked at $2.6 million in 2002, Judd said.
The CEDIT is used for county road improvements, while the CAGIT is distributed to all townships, plus North Vernon, Vernon and the county, for use at their discretion.
He blamed the drop on Muscatatuck, the October 2001 closing of Regal Rugs, which employed 300, and a general economic downturn.
A multimillion dollar jail the county built in 2001 exacerbated the. Officials calculated that paying the bill would be relatively painless, Judd said, but that was before the downturn and closure announcements.
The county appealed in 2003 for an additional $600,000 to be added to the local property tax levy, and the move was approved for 2004. Jennings County will begin collecting the extra in 2005, Judd said.
He said the average household would pay about $60 more in property taxes.
“It’s a big bang,” Judd said. “We’re borrowing from everywhere to stay alive.”
Portions © 2004, The Republic, Columbus, Indiana