We welcome a group of Chinese business people who came to Marion last month. We hope they enjoyed themselves and we certainly hope they come back and see us again.
They are reportedly considering an investment in Marion and to the degree it is helpful to them and to our community, we believe something should be worked out. Of course, we also believe private money should be all at stake in any arrangement.
There have been only a few Chinese companies that have taken root in Indiana, ever. YK Furniture, which would have been installed in an empty building along the Bypass, would have been one of them. It hasn’t worked out. Perhaps the next proposed project will turn out to be different.
But we have learned much in the past decade of “press-release economic development.” Nothing really happens until it actually happens and the show usually involves costs that the people involved — the people supposed to be on the side of taxpayers — hardly consider. As taxpayers roll toward another possible due date to the bank that loaned money to Earthbound, the luxury RV manufacturer the city backed in the face of evidence that its projected success was a fantasy, it would be good to start considering what our local and state government’s flailing about for phantom jobs costs those of us still employed.
Let’s just consider the incentives. This past week The New York Times, not known to be an advocate of restrained government, published a story on just how cavalier many companies treat local communities and their money as they navigate an ocean of public gifting in return for only the promise of jobs. Reporter Louise Story found that states, counties and cities across America are giving up more than $80 billion in incentives to employers throughout the corporate world. That is surely not all.
“A full accounting, The Times discovered, is not possible because the incentives are granted by thousands of government agencies and officials, and many do not know the value of all their awards. Nor do they know if the money was worth it because they rarely track how many jobs are created. Even where officials do track incentives, they acknowledge that it is impossible to know whether the jobs would have been created without the aid.” The Times reported.
“How can you even talk about rationalizing what you’re doing when you don’t even know what you’re doing?” said Timothy J. Bartik, a senior economist at the W.E. Upjohn Institute for Employment Research in Kalamazoo, Mich.
The research by The Times included a database of some known incentives by state. Indiana spends $142 per capita, equaling about 6 percent of its state budget doling out the known incentives. The list includes E.On Climate and Renewables, which has plans to create a wind farm on the Grant County landscape. In a breathtaking disregard of obvious conflict-of-interest last year, E.On paid $65,000 to attorneys who negotiated contracts with them on behalf of our county and its citizens. E.On received $5.9 million from the state in incentives, according to the newspaper.
“A portrait arises of mayors and governors who are desperate to create jobs, outmatched by multinational corporations and short on tools to fact-check what companies tell them,” The Times reports.
Given the reality of how local economic development policy works, of how much money is involved and how scarce that money is for taxpayers, is there any rational justification for our own Grant County Economic Growth Council keeping a secret of how its spends hundreds of thousands of public dollars?
This is a local problem. We cannot begin to get control of it until we can at least find out what is being done with our hard earned tax dollars.
Economic development has become a game. We at least deserve to know if or to what degree we in the public are on the losing side.