Shall we be mealy mouthed and just call it misguided? We can hope it works, but what is the evidence?

As a state and as localities, Hoosiers have spent an unknown quantity of money, time and energy on what is called economic development (ED). Some of this is federal money that can only be used for what is anointed by the Feds as ED.

At one time, ED was bringing jobs, particularly manufacturing jobs to our state. That was broadened to expanding employment in existing manufacturing firms. Then we decided that activities associated with manufacturing (warehousing, for example) was also ED.

More recently, the concept was enlarged to software and some services using software. Lately, we gone further to include workforce training and civic amenities. And almost yesterday, we recognized communications (internet) as ED.

Roads, rails, and waterways have been foundational elements of ED since the founding of the nation. Pressure is building now for an interstate to parallel US 231 in South Central Indiana. As is often the case, countervailing pressure is increasing to stop that road.

But there was hardly any opposition to the West Lake Corridor, an extension of the South Shore Line commuter rail line into Chicago. How could Hoosiers in Northwest Indiana (NWI) object to nearly $900,000,000, mostly federal dollars, to build south from Hammond, through Munster, nine miles to the border with Dyer?

This rail line was a creation of the Northwest Indiana Regional Development Authority (RDA) which itself was a creation of the State of Indiana via the auspices of NWI Democrats and Republicans. It is funded with Federal, by the State and by levies on the governments of NWI.

No adequate study was undertaken before the project was ballyhooed as a reincarnation of the Region’s economy.

This rail line, with limited service to Hyde Park (Univ. of Chicago) and the Loop area of Downtown Chicago, is supposed to attract workers from Downtown Chicago to live in Indiana and to enable residents of NWI to find high-paying jobs in Downtown Chicago. Untested hypotheses (fantasies) are always preferred for ballyhoo.

OK, this project is going to be great for NWI. Then why did the RDA seek $35 million additional dollars to stimulate ED at the West Lake Corridor stations?

In addition, the RDA wants Transit Development Districts (TDDs) - - - also known as Tax Stealing Districts (TSDs) - - - for each of three West Lake stations and plus four stations on the existing South Shore Line.

These TDDs would capture any new property and local income taxes of firms and household within the TDD’s extremely gerrymandered boundaries..

Transit Oriented Development (TOD), also known as Totally Outdated Distraction, is a concept ignoring automobiles, the internet and widely dispersed employment/residential options.

In sum, is all this ED, Economic Development or Economic Dysfunction?

Morton J. Marcus is an economist formerly with the Kelley School of Business at Indiana University. His column appears in Indiana newspapers, and his views can be followed his podcast.

© 2022 Morton J. Marcus