IBJNews

IEDC responds to House speaker's public records request

Back to TopCommentsE-mailPrintBookmark and Share

Indiana Secretary of Commerce Mitch Roob on Tuesday defended the state's economic development efforts in a response to House Speaker Pat Bauer’s request for public records related to the state’s job-creation figures, which the South Bend Democrat has said he suspects are inflated.

On June 8, Bauer sent Roob a letter formally requesting that the Indiana Economic Development Corp. disclose records about promises companies gave the state in exchange for job-creation incentives. He also asked for records to show whether firms kept their pledges. IBJ.com reported on the public records dustup June 14.

Roob replied with a three-page letter of his own on Tuesday, saying that many local firms and companies headquartered elsewhere have invested in Indiana expansions over the last five years due to the state’s business climate, not incentives. He credits Gov. Mitch Daniels for the pro-business environment, with bi-partisan support of the General Assembly.

Roob wrote that IEDC only uses incentives when other states compete for projects that are also under consideration here. In those scenarios, Roob wrote, Indiana offers incentives worth an average $8,502 per job, which he called the lowest amount possible. Roob wrote that competing states often offer five times that much.

According to Roob’s letter, Indiana sets a ceiling for the amount of tax credits companies are eligible to receive. He then pointed out that Bauer, in 1994, was the primary sponsor of legislation that created the Economic Development for a Growing Economy, or EDGE, tax credit, which is the state’s most powerful and most frequently used economic development incentive.

“The program you helped design protects taxpayers by providing incentives specifically tied to the creation of net new jobs only after new incremental payroll taxes have been generated and paid,” Roob wrote. “Taxpayers are protected because the companies do not receive incentives until they perform. If a project fails in its entirety, the company is not entitled to any of the tax credits it was offered. Conversely, if a company exceeds its job creation projections, no additional incentives are awarded.”

Roob wrote that IEDC determines a company is not in compliance with its incentives deal when it ceases operations, relocates its project outside the state, reduces employment levels after receiving state incentives, or otherwise defaults under a material term of the agreement.

According to Roob, 42 projects originated since 1994 ended up in non-compliance status. As a result, Roob wrote, IEDC has pursued $10.5 million in collections. Attached to the letter was a list of projects and the status of the state’s clawback efforts.

“From 2005 to 2008, the IEDC secured 637 decisions by companies to locate projects in the state, which could have located elsewhere,” Roob wrote. “The companies collectively projected that these decisions would result in 78,688 new jobs. Shortly after we closed the books on 2009, we concluded that 66 of the 637 projects announced from 2005 to 2008 were not moving forward, which accounts for 13 percent of the previously anticipated new jobs. We promptly reflected our revised job projections in our 2009 annual report. While some of these projects commenced operations and partially performed before failing, only $13,032 in tax credits and $123,924.67 in training dollars were expended and are deemed unrecoverable.”

As for the 160 projects IEDC announced in 2009, Roob wrote that the companies have collectively indicated they added 5,280 new jobs, or 102 percent of their projections. In 2010 so far, he wrote, IEDC has secured 89 job-creation commitments from companies who promised to locate 13,141 new jobs in Indiana.

“Our state’s success in economic development is a direct result of bipartisan frugality,” Roob wrote, before inviting Bauer to meet for further discussion in person. “In our service to the citizens of Indiana, however, it is important that we work together to clear up any misconception that the longstanding EDGE tax credit program puts tax dollars at risk.”

ADVERTISEMENT

  • Reading Comprehension 101
    Take a chill pill there CK (I or should I say PB). Maybe you can read but the comprehension side is lacking. So I'll help you out...in 1994 PB sponsored legislation creating the primary job creation incentive. So MR was using that as the baseline for his response to clue PB in that PB's own legislation was actually well written; was being effectively and efficiently utilized; was being properly enforced. Pretty simple, really.
  • RELEVANCE OF 1994???
    Why is the guy giving data back to 1994? What relevance? Are they trying to collect from some deadbeat company from 1994? HOW MANY NONCOMPLIANCE COMPANIES UNDER ROOB's watch? How many have they collected from?

    Business 101 Separate the DISCIPLINES... One GROUP award the Incentives and another GROUP Access Performance and is the ENFORCEMENT ARM. ROOB it is called SEGREGATION OF DUTIES. It is one of the 1st things your taught iin business school which teach proper business/accounting controls....

    CAN WE GET BAUER TO DUMB DOWN WHAT ALL THE BS is?

    Post a comment to this story

    COMMENTS POLICY
    We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
     
    You are legally responsible for what you post and your anonymity is not guaranteed.
     
    Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
     
    No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
     
    We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
     

    Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

    Sponsored by
    ADVERTISEMENT

    facebook - twitter on Facebook & Twitter

    Follow on TwitterFollow IBJ on Facebook:
    Follow on TwitterFollow IBJ's Tweets on these topics:
     
    Subscribe to IBJ
    1. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

    2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

    3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

    4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

    5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.

    ADVERTISEMENT