Job Creation Delusions

Given the state of the economy, it’s understandable that candidates and incumbents alike would focus on job creation. It’s also understandable that the mayor and governor would make a big deal out of promises to locate new factories in Indianapolis.

But it’s beginning to look as if the “vetting” process could use some vetting of its own.

Yesterday, Mitch Daniels and Greg Ballard–along with representatives from Develop Indy–held a media event at a field in northwest Indianapolis to announce that a California businessman would be building a factory to manufacture huge TV screens mounted on trucks. (Reading the initial story, my husband opined that the business seemed goofy to him, but I reminded him that, at our ages, we’re tech dinosaurs, so what did we know?)

Turns out it isn’t just the business plan that’s goofy. First the IBJ ran a story noting that the owner of the enterprise lacked experience. Then this morning’s Star reported on the bizarre behavior of both the “entrepreneur” and a project manager from Develop Indy. The story also noted that Litebox, the company being applauded for bringing jobs to Indianapolis, had yet to purchase the land on which the factory was supposed to be built.

Economic development is never a sure thing. Well-conceived, well-financed projects may not make it. But surely, before they commit public resources to a project, the city and state could do a minimal amount of due diligence.

The media have raised questions before about the veracity of jobs claims made by both the state and city, and this embarrassing episode would seem to confirm their skepticism.

It’s hard not to to speculate over the timing of this announcement–apparently, it was rushed in order to help Ballard before the election. It blew up in his face, and didn’t add any luster to the Daniels administration, either. That’s what happens when people act out of desperation.

1 Comment

  1. The Indpls. STAR article omitted some important questions:

    $20 M in tax abatements and other incentives amounts to $18,181 per job.

    * How long will it take the company and its job holders to pay back the tax breaks the rest of us are subsidizing? What will the job holders pay
    in state and local taxes?

    * How much longer than that will the company stay here so that Indianapolis does more than just break even on this arrangement?

    * Are there protections for taxpayers written into the contract so that the company can’t drive its mobile screens and jobs to some other community before it pays back all the incentives local taxpayers have financed?

    * If they don’t produce the jobs promised, do they pay back the tax breaks?

    Many Mayors across the state and country are sadder but wiser after being taken to the cleaners on unfulfilled promises of new jobs and/or investing in infrastructure improvements for new companies that leave town as soon as the tax breaks run out. I want companies who will put down roots, grow, thrive, and STAY in our community.

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