Latest news with #IndianaEconomicDevelopmentCorp
Indianapolis Star
2 days ago
- Business
- Indianapolis Star
Indiana taxpayers shouldn't subsidize $168M in data center corporate welfare
The next time you see a huge data center pop up in your backyard, enjoy it, because you're paying for it. If the Indiana Economic Development Corp. gets its way, the state will have four new energy-and-water-hogging data centers in high-population areas — all funded by you, the taxpayer. The IEDC recently approved $168 million in tax incentives to attract four data centers. Hoosiers will be subsidizing these monstrosities for up to 50 years. Government leaders claim they will create jobs — a total of 180. For those keeping count at home, that's more than $930,000 in taxpayer money per job being "created." Hicks: Braun's smart IEDC picks must now tackle Indiana's development spending mess Indiana has become a haven for data centers because, in 2019, the state government allowed them a 35-year tax exemption to entice them to plop down in Hoosier cornfields. As Libertarians, we believe in private property rights. You can do what you want with your justly acquired property, as long as you pay for it and you own the property. However, the line is drawn when governments get involved. Governments should not take land from others, nor should it hand out bags of tax money and incentives to give one business a leg up over any other competing uses for a property. Nearly all of these data center projects are in high-growth, high-demand suburban areas, where there would be multiple viable uses for the land. Without incentives, the market prevails — and the data centers likely find less populated areas to locate. We also believe in transparency. These four projects are using code names because they're operating in secrecy to prevent the public from knowing which companies they're throwing your money toward. One of the projects, in Hancock County (or Project Redline), is being proposed by Surge Development LLC. Its principal, Chris King, just happens to be an IEDC board member. This approval doubles down on a data center plan Surge recently withdrew due to intense public opposition. The Republican-led state government claims to be pro-business. It needs to embrace the free market instead. Free markets don't have governments picking winners and losers, nor making deals in secret. Free markets don't use taxpayer incentives to favor one business over another. They don't have governments spending billions to buy land and then turn it over to other private companies, as happened in the controversial LEAP project in Boone County. They don't privatize profits and leave the losses on the backs of the taxpayer. Opinion: Indiana's 201% cigarette tax hike will fuel smuggling, not just revenue For every new state-funded project by the IEDC, taxpayers get the shaft. They have to pay for the road, water and power lines, while the businesses themselves are getting a break from paying sales and property taxes, especially as local governments pile on with tax abatements of their own. That means residents and small businesses who have been in the community for years get to shoulder more of the burden of paying for roads, schools and public safety. If Indiana truly wants to be pro-business, it needs to embrace the free market. No tax abatements, no exemptions, no handouts, no special favors that the common citizen or small business doesn't have access to. Instead, focus on keeping taxes low and having a common-sense regulatory environment. Indiana should abolish the IEDC, as well as local economic development corporations. A business can thrive on its own. It doesn't have to mooch off the taxpayers to do so.
Chicago Tribune
24-06-2025
- Business
- Chicago Tribune
Critical of economic agency, Braun removes 9 board members
Gov. Mike Braun dumped nine members off the Indiana Economic Development Corp. on Monday and replaced them with new members, including two men from Porter County — businessman Gus Olympidis and union officer David Fagan, of Portage. Olympidis, a past member of the board of directors of the Northwest Indiana Regional Development Authority, owns a network of Family Express convenience stores/gas stations. Fagan is financial secretary for the International Union of Operating Engineers Local 150 and is a commissioner on the board of directors at the Ports of Indiana. Braun didn't retain any of the previous members in the quasi-state agency that he's heaped criticism on for its lack of transparency. Among those removed were Newton County's Fair Oaks Farms cofounder Sue McCloskey. 'I spent my life building a business here in Indiana, and I know that having an entrepreneurial, high-energy team in your corner makes all the difference,' Braun said in a release. As governor, Braun chairs the IEDC board. One of Braun's new appointments, John Gregg, is a former Democratic gubernatorial candidate and former Indiana House Speaker. Improving transparency on the IEDC board was one of Braun's campaign pledges last year. In April, Braun ordered a forensic audit of the IEDC's private fundraising foundation. Braun also signed an executive order seeking financial disclosures from the foundation. The foundation, which has been exempt from IRS disclosure filings since 2012, funded many of former Gov. Eric Holcomb's overseas trips. It's declined to provide information on money spent on the trips, saying no public money was used. Some foundation donors have also not been disclosed. The foundation's website, however, lists five 'contributors,' including the Northern Indiana Public Service Co. Like many states, Indiana had a traditional commerce department until 2005. Former Gov. Mitch Daniels established the IEDC with legislation stating it wasn't a state agency. The IEDC board was allowed to create the foundation. Other new board members include, George Thomas, a Granger entrepreneur of the companies Adorn, Duo-Form and more; Billie Dragoo, of Indianapolis, RepuCare founder and CEO; Greg Gibson, of Terre Haute, a commercial real estate, food service, and waste industry entrepreneur; Richard Waterfield, Waterfield Enterprises and Asset Management chairman; Runnebohm Construction vice president Chris King of Shelbyville; and Indiana State Department of Agriculture leader and farmer Don Lamb.
Indianapolis Star
23-06-2025
- Business
- Indianapolis Star
Braun overhauls IEDC board, appoints well-known Democrat, over displeasure with state agency
Indiana Gov. Mike Braun has completely overhauled the leadership of the state's economic development arm, the latest of several moves that signal Braun is departing from his predecessors in the operation of the Indiana Economic Development Corp. Braun announced June 23 that he appointed nine new members to the IEDC's board, including entrepreneurs, business owners, a union representative, and even a Democrat: former gubernatorial candidate John Gregg. None of the prior members were retained. 'I spent my life building a business here in Indiana, and I know that having an entrepreneurial, high-energy team in your corner makes all the difference," Braun said in a statement. Braun said "each of them knows the importance of growing wages and creating job opportunities for Hoosiers because they've done it in their own communities." Braun told reporters to expect a full overhaul of the board, which oversees how millions of dollars worth of economic development incentives are doled out. The quasi-state agency has been criticized in the past by both Republicans and Democrats for not operating with enough transparency in its dealings. "I think that board got to be maybe not as active as it should have been and I've got a lot of people interested in it," Braun said last week. The former board members include Penske Entertainment Corp. president Mark D. Miles, executive chairman of Lake City Bank Michael Kubacki and Fair Oaks Farms cofounder Sue McCloskey, among others. Braun thanked prior members for their service, which ended with the appointment of new members, in a statement sent June 23. The new members to the IEDC board include: Gregg, who is also the former Indiana House Speaker; Family Express convenience stores owner Gus Olympidis of Valparaiso; George Thomas, a Granger entrepreneur of the companies Adorn, Duo-Form and more; RepuCare founder and CEO Billie Dragoo of Indianapolis; International Union of Operating Engineers Local 150 member David Fagan; commercial real estate and waste industry entrepreneur Greg Gibson; Waterfield Enterprises and Asset Management chairman Richard Waterfield; Runnebohm Construction vice president Chris King of Shelbyville; and Indiana State Department of Agriculture leader Don Lamb. This story will be updated.
Yahoo
28-04-2025
- Business
- Yahoo
IEDC needs to get out of the real estate development business
Media reports identified significant accounting problems at the Indiana Economic Development Corp. In response, Gov. Mike Braun has ordered an independent accounting audit. Every Hoosier should applaud that order, but the problems with the IEDC are broader than an accounting issue. Indiana is at a point where fundamental questions about economic development policy and the role of the IEDC need a full-throated public debate. It is best to begin with what the IEDC and the state's development policies get right. Among former Gov. Mitch Daniels' very first public acts was to reorganize the state's Department of Commerce. He moved the business development group to a new quasi-public corporation, the IEDC, and moved other responsibilities in community development, tourism, energy development and agriculture into their own agencies. This reorganization worked very well and sparked a great deal of innovation, particularly in rural policy. At the IEDC, the reorganization attracted talented staff and leadership who embodied the Daniels ethic: lean, effective, efficient and humble. Hicks: Running Indiana like a business has failed When I arrived in Indiana in summer 2007, I was shocked at the quality of IEDC and its small size. It was then about 65 people. Ohio, Illinois and Michigan had well over 500 people working in unwieldy organizations trying to perform many of the same tasks. In 2013 I co-authored an efficiency study of the IEDC comparing it to other groups across the country. It fared extraordinarily well by comparison. So, too, did its venture capital arm, which we also studied. The key thing about the IEDC was the conceptual simplicity of its mission. It acted as a supporter of Indiana, providing services to businesses looking for a home. It mapped sites around the state, oversaw a modest tax incentive program and provided a fast, efficient processing of well over 1,000 requests by businesses each year. The Pence administration viewed the IEDC quite similarly, appointing seasoned businessmen to lead it. There was a modest expansion of duties to oversee the Regional Cities Initiative, which ended up being one of the most successful place-based economic development policies of the 21st century. All that changed during the Holcomb administration, though the legislature and new leadership played a big role in this change. Instead of acting as a business concierge, the IEDC morphed into a real estate development company, pushing the state's economic development polices back into the 1970s. This badly distorted the IEDC's mission, including pushing for incentives to relocate corporate headquarters within the state. The most obvious, but certainly not the only problem, was the LEAP district in Lebanon. Over the coming years, much will be written about the folly of this project. Hoosiers will be lucky if we taxpayers lose only a few hundred million dollars in the endeavor. What we do know is that no private developer would have done such a deal without performing better due diligence. The IEDC needs to get out of the real estate development business. We should offer Braun considerable grace in dealing with this monumental error foisted upon his administration. But it's also time to wholly reconsider our policies toward making the Hoosier economy grow. The first thing we should do is acknowledge that the IEDC isn't going to make Indiana a prosperous place. That cannot be its job. It should tell the story of Indiana, warn legislators when there are problems, answer every question a potential business has about the state and do almost nothing else. We also need to understand that economic growth is a private sector matter and the government exists only to create conditions for growth. Allocating tax dollars to land development won't cause economic growth. We also need to acknowledge that mobile American families and businesses aren't looking for low-tax environments. They aren't the mono-dimensional idiots that the anti-tax crowd supposes them to be. American families and businesses are savvy and look for places where the quality of public services is a good match to their taxes. They are looking for value, not just price. In the modern economy, jobs follow people. People don't follow jobs. That's been increasingly true for a half-century. Today, only a tiny fraction of new jobs are created in the types of businesses that could be lured through tax incentives, the traditional tool of economic developers. Hicks: Indiana is paying companies to cut jobs If business tax incentives worked, Indiana would have among the strongest economies in the nation. When Daniels took office, Hoosier manufacturing firms ranked 36th from the bottom in low tax rates. Today, they rank 4th-lowest and factory employment is down by 10%. I know of no researcher who studies tax incentives and thinks they boost job creation in any meaningful way. Trust me, an economics professor could get rich by finding defensible estimates of tax incentives boosting a region's economy. It's time to reconsider how Indiana approaches economic development. But the biggest reason to have a statewide debate on economic development policy is the passage of Senate Enrolled Act 1 and its unintended effect on the state's single-largest business incentive. Indiana's new tax reforms in SEA 1 render our most common form of tax incentives — local property tax abatements and tax-increment financing — unusable and obsolete. Since the Daniels reforms, local governments have been able to grant a tax abatement (no tax payments) to businesses for up to 10 years and TIF districts for 25 years. Most local governments, desperate for new businesses and their tax revenues, offered lavish abatements or created TIF districts. In doing so, they essentially deferred all taxes for a decade, knowing that after that time, they'd be able to tax that investment at 30% of its value. For dozens of cities and counties with large factories and logistics firms, this remains a major source of tax revenues. SEA 1 ended that. No rational mayor or county commission will again offer tax abatements or TIF. It'd be spectacularly moronic to have a business come to a town, use public services and never pay a cent in taxes. Over the past half-century, the economy changed, making high-quality public services that attract new residents the ticket to economic growth. Then, during the Holcomb administration, Indiana ditched its small government economic development policy for an embarrassing and costly real estate speculation plan. And, finally, in a hastily developed tax plan, the legislature effectively ended the state's largest and most widely used economic development tools. All of these facts force Indiana to re-examine how it approaches economic development policy. Michael J. Hicks is the director of the Center for Business and Economic Research and the George and Frances Ball distinguished professor of economics in the Miller College of Business at Ball State University. This article originally appeared on Indianapolis Star: IEDC audit begins reckoning over economic development | Opinion
Indianapolis Star
28-04-2025
- Business
- Indianapolis Star
IEDC needs to get out of the real estate development business
Media reports identified significant accounting problems at the Indiana Economic Development Corp. In response, Gov. Mike Braun has ordered an independent accounting audit. Every Hoosier should applaud that order, but the problems with the IEDC are broader than an accounting issue. Indiana is at a point where fundamental questions about economic development policy and the role of the IEDC need a full-throated public debate. It is best to begin with what the IEDC and the state's development policies get right. The IEDC was a model of efficiency Among former Gov. Mitch Daniels' very first public acts was to reorganize the state's Department of Commerce. He moved the business development group to a new quasi-public corporation, the IEDC, and moved other responsibilities in community development, tourism, energy development and agriculture into their own agencies. This reorganization worked very well and sparked a great deal of innovation, particularly in rural policy. At the IEDC, the reorganization attracted talented staff and leadership who embodied the Daniels ethic: lean, effective, efficient and humble. Need a break? Play the USA TODAY Daily Crossword Puzzle. When I arrived in Indiana in summer 2007, I was shocked at the quality of IEDC and its small size. It was then about 65 people. Ohio, Illinois and Michigan had well over 500 people working in unwieldy organizations trying to perform many of the same tasks. In 2013 I co-authored an efficiency study of the IEDC comparing it to other groups across the country. It fared extraordinarily well by comparison. So, too, did its venture capital arm, which we also studied. The key thing about the IEDC was the conceptual simplicity of its mission. It acted as a supporter of Indiana, providing services to businesses looking for a home. It mapped sites around the state, oversaw a modest tax incentive program and provided a fast, efficient processing of well over 1,000 requests by businesses each year. The Pence administration viewed the IEDC quite similarly, appointing seasoned businessmen to lead it. There was a modest expansion of duties to oversee the Regional Cities Initiative, which ended up being one of the most successful place-based economic development policies of the 21st century. LEAP District was a monumental error All that changed during the Holcomb administration, though the legislature and new leadership played a big role in this change. Instead of acting as a business concierge, the IEDC morphed into a real estate development company, pushing the state's economic development polices back into the 1970s. This badly distorted the IEDC's mission, including pushing for incentives to relocate corporate headquarters within the state. The most obvious, but certainly not the only problem, was the LEAP district in Lebanon. Over the coming years, much will be written about the folly of this project. Hoosiers will be lucky if we taxpayers lose only a few hundred million dollars in the endeavor. What we do know is that no private developer would have done such a deal without performing better due diligence. The IEDC needs to get out of the real estate development business. We should offer Braun considerable grace in dealing with this monumental error foisted upon his administration. But it's also time to wholly reconsider our policies toward making the Hoosier economy grow. The first thing we should do is acknowledge that the IEDC isn't going to make Indiana a prosperous place. That cannot be its job. It should tell the story of Indiana, warn legislators when there are problems, answer every question a potential business has about the state and do almost nothing else. Leave economic growth to the private sector We also need to understand that economic growth is a private sector matter and the government exists only to create conditions for growth. Allocating tax dollars to land development won't cause economic growth. We also need to acknowledge that mobile American families and businesses aren't looking for low-tax environments. They aren't the mono-dimensional idiots that the anti-tax crowd supposes them to be. American families and businesses are savvy and look for places where the quality of public services is a good match to their taxes. They are looking for value, not just price. In the modern economy, jobs follow people. People don't follow jobs. That's been increasingly true for a half-century. Today, only a tiny fraction of new jobs are created in the types of businesses that could be lured through tax incentives, the traditional tool of economic developers. If business tax incentives worked, Indiana would have among the strongest economies in the nation. When Daniels took office, Hoosier manufacturing firms ranked 36th from the bottom in low tax rates. Today, they rank 4th-lowest and factory employment is down by 10%. I know of no researcher who studies tax incentives and thinks they boost job creation in any meaningful way. Trust me, an economics professor could get rich by finding defensible estimates of tax incentives boosting a region's economy. It's time to reconsider how Indiana approaches economic development. But the biggest reason to have a statewide debate on economic development policy is the passage of Senate Enrolled Act 1 and its unintended effect on the state's single-largest business incentive. Indiana's new tax reforms in SEA 1 render our most common form of tax incentives — local property tax abatements and tax-increment financing — unusable and obsolete. Since the Daniels reforms, local governments have been able to grant a tax abatement (no tax payments) to businesses for up to 10 years and TIF districts for 25 years. Most local governments, desperate for new businesses and their tax revenues, offered lavish abatements or created TIF districts. In doing so, they essentially deferred all taxes for a decade, knowing that after that time, they'd be able to tax that investment at 30% of its value. For dozens of cities and counties with large factories and logistics firms, this remains a major source of tax revenues. SEA 1 ended that. No rational mayor or county commission will again offer tax abatements or TIF. It'd be spectacularly moronic to have a business come to a town, use public services and never pay a cent in taxes. Over the past half-century, the economy changed, making high-quality public services that attract new residents the ticket to economic growth. Then, during the Holcomb administration, Indiana ditched its small government economic development policy for an embarrassing and costly real estate speculation plan. And, finally, in a hastily developed tax plan, the legislature effectively ended the state's largest and most widely used economic development tools. All of these facts force Indiana to re-examine how it approaches economic development policy.
