EDITORIAL: It's time to crash incentive party for economic development

The IBJ

   Many cities find themselves in a financial pinch these days, as they prepare to live within property-tax caps passed by the Indiana General Assembly.

   Local governments will have no choice but to make tough decisions about where to spend tax dollars. Overall, that's a good thing. But we hope government leaders don't focus solely on the expense side of the ledger. Fixing the state's property tax mess isn't just about spending less. It's also about making sure everyone pays a fair share.

   That's why we're so troubled by the recent spate of economic-development announcements involving companies moving from one central Indiana county to another-and receiving tax abatements or other incentives in the process.
   As IBJ reported last week, doling out incentives to reshuffle companies that already are in the region strikes some observers as a waste of precious tax dollars.
   Include us in that camp. We aren't buying the argument of economic-development officials that without the incentives many of these companies would be at risk of getting scooped up by out-of-state communities dangling their own packages. Companies usually are where they are for good reason-typically to be close to suppliers or customers.
   Take Bowen Engineering, one of at least six area firms that have announced in the past year they were moving headquarters to a different central Indiana county. Bowen was founded here 40 years ago. Is it really at risk of going out of state?
   Yet the company secured Marion County tax abatements valued at $290,389 as part of its recently announced relocation from Fishers to the 8800 block of North Meridian Street. The move will bring 103 highpaying jobs to Indianapolis and, over time, perhaps 138 new jobs.
   Economic-development officials say they recognize counties in our region should not be in the business of cherry-picking firms from one another.
   Marion County officials courted Bowen only after the company couldn't find space it liked near its current home. They opened talks after Fishers granted a release letter-something communities do when companies suggest they might move outside central Indiana.
   Yet this all seems like a charade to us. The granting of incentives has gotten so out of hand that companies feel like suckers if they don't seek a handout. A key part of the game is to make rumblings about leaving the area.
   Companies taking the largess aren't the real problem. Many longtime businesses have watched with dismay for years as officials doled out incentives to attract out-of-state businesses here. Understandably, they wonder, "What about me?"
   We think governments need to be stingier with incentives for both groups-those they're trying to lure here and those already in the region.
   It's possible central Indiana could lose a plum deal or two with tighter policies, but we doubt it. Under the current system, many firms engage in a game of bluff-and governments have been all too willing to play along.