But eventually the abuses of tax increment financing, tax breaks and sweetheart deals will roil the public because it’s unsustainable. Cities and towns will run out of money to give away. Schools will suffer, crime will be common in communities that invested in selling themselves as television's "Mayberry."
Abusing TIF: We're Hurt by What We Don't Know
by David Penticuff
The nonchalance public officials in Indiana show practical democracy and the public’s right to know is perhaps only rivaled by the indifference of the public itself.
That is how a parasitic bumbledom thrives. It’s just too much trouble to keep everyone honest and expose how public treasure is spent for personal gain. Even if we did, would the plight of the community workforce be any different? Hard to say since, as our socialist friends are wont to say about their own abiding dream, real honest and open economic development has never really been tried.
Alas, a whole wing in the effort make economic development organizations accountable to the public for the money they throw at potential employers, and in some cases potential employees, was demolished at the end of the 2019 General Assembly Session when House Bill 1375 was passed. Part of the language erased the impact of an opinion by the state's Public Access Counselor Luke Britt that extended the scope of the Open Door Law and Access to Public Records Act to local economic development corporations subjected to a SBOA audit.
Meanwhile, the General Assembly failed to pass SB 157, which would have required corporations receiving tax breaks in exchange for job creation actually report the number of jobs that are created.
“It should be fundamental for government to be conscious of being transparent,” said State Sen. Lonnie Randolph, D-East Chicago, who authored the legislation. Randolph is not affiliated with the Tea Party. He is president of the Indiana Black Legislative Caucus. “There has got to be a reason why” Randolph pondered, that all the economic development folks don’t want to let the public know how their money is being spent.
Randolph said Indiana does not have a tracking system to assure employers taking advantage of economic development incentives follow through on their promises. The reasons, we think, are obvious. An entire industry has been created around the lure of employers to a specific geographic area. The amount of money, millions of dollars, spent in this regard at the local level is rivaled only by school funding. Except it doesn’t work very well, which is what more honesty openness in economic development would show. People running this game don’t want it to stop because it is their livelihood.
Even though it is true that leaving money in the pockets of individuals in the community or spending on infrastructure, battling crime, working on mental health issues or reinforcing quality schools would actually do better for communities than giving away tax dollars to employers who are conditioned to seek handouts.
In good times, politicians and rent seekers claim the time is now to take full advantage of growth by way of government aid to employers. In bad times, well, who is against economic development when times are bad? It is virtually un-American to not support a scheme to create jobs for people when jobs are scarce.
But eventually the abuses of tax increment financing, tax breaks and sweetheart deals will roil the public because it’s unsustainable. Cities and towns will run out of money to give away. Schools will suffer, crime will be common in communities that invested in selling themselves as television's "Mayberry."
Alas, Mayberry never had a TIF district aimed at enriching the few and that town didn’t hide behind state laws that kept its citizens from knowing how their money was spent.
by David Penticuff
The nonchalance public officials in Indiana show practical democracy and the public’s right to know is perhaps only rivaled by the indifference of the public itself.
That is how a parasitic bumbledom thrives. It’s just too much trouble to keep everyone honest and expose how public treasure is spent for personal gain. Even if we did, would the plight of the community workforce be any different? Hard to say since, as our socialist friends are wont to say about their own abiding dream, real honest and open economic development has never really been tried.
Alas, a whole wing in the effort make economic development organizations accountable to the public for the money they throw at potential employers, and in some cases potential employees, was demolished at the end of the 2019 General Assembly Session when House Bill 1375 was passed. Part of the language erased the impact of an opinion by the state's Public Access Counselor Luke Britt that extended the scope of the Open Door Law and Access to Public Records Act to local economic development corporations subjected to a SBOA audit.
Meanwhile, the General Assembly failed to pass SB 157, which would have required corporations receiving tax breaks in exchange for job creation actually report the number of jobs that are created.
“It should be fundamental for government to be conscious of being transparent,” said State Sen. Lonnie Randolph, D-East Chicago, who authored the legislation. Randolph is not affiliated with the Tea Party. He is president of the Indiana Black Legislative Caucus. “There has got to be a reason why” Randolph pondered, that all the economic development folks don’t want to let the public know how their money is being spent.
Randolph said Indiana does not have a tracking system to assure employers taking advantage of economic development incentives follow through on their promises. The reasons, we think, are obvious. An entire industry has been created around the lure of employers to a specific geographic area. The amount of money, millions of dollars, spent in this regard at the local level is rivaled only by school funding. Except it doesn’t work very well, which is what more honesty openness in economic development would show. People running this game don’t want it to stop because it is their livelihood.
Even though it is true that leaving money in the pockets of individuals in the community or spending on infrastructure, battling crime, working on mental health issues or reinforcing quality schools would actually do better for communities than giving away tax dollars to employers who are conditioned to seek handouts.
In good times, politicians and rent seekers claim the time is now to take full advantage of growth by way of government aid to employers. In bad times, well, who is against economic development when times are bad? It is virtually un-American to not support a scheme to create jobs for people when jobs are scarce.
But eventually the abuses of tax increment financing, tax breaks and sweetheart deals will roil the public because it’s unsustainable. Cities and towns will run out of money to give away. Schools will suffer, crime will be common in communities that invested in selling themselves as television's "Mayberry."
Alas, Mayberry never had a TIF district aimed at enriching the few and that town didn’t hide behind state laws that kept its citizens from knowing how their money was spent.
David Penticuff, a veteran Indiana editor who has written extensively on economic-development strategies, is an adjunct scholar of the Indiana Policy Review Foundation.
The Indiana Policy Review Foundation is a non-profit education foundation focused on state and municipal issues. It is free of outside control by any individual, organization or group. It exists solely to conduct and distribute research on Indiana issues. Opinions expressed in signed articles do not necessarily represent the views of the editors, the Indiana Policy Review Foundation, or its board of directors. Nothing in this journal, whether in print or pixels, is an attempt to aid or hinder the passage of any bill or influence the election of any candidate.
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