Now that it’s over, let’s talk recession

 

Let’s separate growth from economic development. Growth is more of what we have. Economic development is an increase in our choices. Another burger place with 20 more part-time burger flipping jobs is growth. A Burmese family starting a Burmese restaurant, where there are no such restaurants, is an increase in choice and is a small step in economic development.

Who should pay for growth? Normally, we say the private sector should pay for growth and even pick up the bill for inconveniences inflicted on others. That is why, if my memory is correct, there was a hot dispute years ago in Shelbyville when a big chain grocery wanted the city to pay for a stoplight and road improvements at the entrance to its new store.

A proposed sub-division in Southwest Indiana, just off the new I-69, will offer housing and commercial space not currently available in town. Is this growth or development? Who should pay for the roads, sewers and water lines necessary for this sub-division? The private land owner? Taxpayers? Other businesses? The Economic Development Corporation (EDC)?

Many EDCs are public-private partnerships. They may get tax dollars from the local Economic Development Income Tax (EDIT) and/or Tax Increment Financing Districts (TIFs). In addition, EDCs are usually funded by local firms such as public utilities, banks, realtors, and others that see their futures tied to the well-being of the community.

As public-private entities, EDCs do not have to meet even the weak standards of transparency required of local governments. Some EDCs involve themselves in community development projects because the line between community and economic development is blurry. Is a swimming pool economic or community development? Does it matter if it makes a place a more desirable place to live and work?

EDIT money comes from those who live in the county. These funds could be used to alleviate the pressures of poverty. TIF funds are property taxes that could be used to expand government services by cities and towns, schools and libraries. Should we expect low paid workers and poor homeowners to bear part of the burden of development projects from which they may not benefit?

These are questions of equity. They can be answered if the EDCs of the state, starting with the Indiana Economic Development Corporation (IEDC), understood they have an on-going public responsibility to demonstrate the value of their activities.

Look at the web site of your local EDC. Does it tell you how they spend their money? Does it indicate with some specificity who benefits from their activities? Do they issue an annual report that is more than platitudes about projects for which they take credit?

Public concerns about how EDCs operate are often stifled in meetings because only a few citizens express their misgivings. Those who question specific economic development activities are labeled as petulant and perpetual nay-sayers.

Economic development has been accepted widely as a public good, yet EDCs (by whatever name) cannot ignore legitimate questions. We need think only of a basketball arena and a football field in Indianapolis.

Mr. Marcus is an economist, writer, and speaker who may be reached at mortonjmarcus@yahoo.com.

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