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House Speaker pushes IEDC over job-creation numbers

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House Speaker Pat Bauer is picking a fight with the Indiana Economic Development Corp. over its job-creation figures, which the Democrat from South Bend suspects are inflated.

Last week, Bauer sent Indiana Secretary of Commerce Mitch Roob a letter formally requesting the Indiana Economic Development Corp. disclose public 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.

In the letter, Bauer cites media reports from March that quoted Roob saying that 87 percent of the jobs promised by companies receiving state incentives have actually been created.

“This, by your own admission, means 13 percent of the jobs that were promised were not realized,” Bauer’s letter reads.

Bauer’s letter points out that the incentive-compliance reports IEDC has submitted to the General Assembly showed no gap between jobs promised and created. Citing Indiana’s Access to Public Records act, Bauer requested any records with evidence explaining the 13-percent difference Roob had cited.

“I am aware that your agency has refused to release various records relating to job creation incentives in the past. I am also aware that the IEDC has broad discretion under IC 5-14-3-4.5 to keep records relating to incentive negotiations confidential,” Bauer’s letter reads. “As you may know, K-12 education has been cut by $300 M. Some estimate that as many as 7,000 teachers will lose their jobs, and the state unemployment rate remains around 10 percent. In theses times, I would urge the IEDC to exercise its discretion in favor of sharing vital information with Hoosier taxpayers about Indiana’s true level of job creation success.”

In response to IBJ's questions about the letter, Roob gave the following written statement: “We have received Speaker Bauer’s letter and look forward to responding to him accordingly.”

Bauer said a March investigative story by Channel 13 initially prompted his concerns about IEDC. In the months since, Bauer said, he and State Rep. Bill Crawford, D-Indianapolis, have repeatedly asked for information from IEDC about where and how incentives have been offered and cashed in.

Bauer said he's particularly interested in potential incentive-clawback opportunities to generate revenue that could help “keep schools open and keep the lights on.” He said IEDC has responded with “stonewalling.”

“We’re getting nothing,” Bauer said “We have a right to know how money was spent or misspent.”

IEDC frequently offers incentives to companies that agree to relocate to Indiana or expand their operations here. Most of the awards are in the form of state tax credits and training grants. Incentive deals regularly also include property-tax abatements from local governments. Bauer noted that last year President Obama’s economic stimulus money was also a factor.

According to IEDC’s 2009 annual report, it worked with 160 companies last year, resulting in $1.96 billion in capital investments and promises to deliver 19,955 new jobs at an average hourly wage of $20.95. According to the report, it provided $8,701 in incentives per job.

In the last two years, many companies have had to scuttle expansion plans they made before the recession began. Bauer acknowledged that reality, but said he suspects IEDC has been over-reporting job numbers since before downturn. He wants to investigate the results of company job pledges all the way back to IEDC’s formation in 2005, he said.

Based on media reports, Bauer said he worries IEDC’s job-count inflation is far higher than 13 percent.

“If people said they were going to provide jobs and received money from the state and didn’t create them, it’s fraud,” he said.

It’s odd, and “in some ways, it’s scandalous,” that Bauer, the Democrat with the highest elected position in Indiana politics, has to use a public records request to obtain information from IEDC, said IUPUI Political Science professor Brian Vargus. He said it’s likely that Bauer is legitimately frustrated about IEDC’s lack of responsiveness, and concerned about where incentives went.

But, Vargus noted that Bauer often uses a “street brawl” brand of politics. The House Speaker is clearly concerned about midterm elections this fall, Vargus said, when Republicans could re-take control of the Indiana House of Representatives. Led by Bauer, Democrats currently control the chamber by a 52-48 margin.

IEDC’s response to the records request—or lack of one—could become a talking point for Democrats on the campaign trail this fall. In a deep recession, Vargus said, voters' minds will be on three topics: “jobs, jobs, jobs.”

“It’s obviously a way to get some information that can be used in attacking the governor. Because the main substance of the media reports was the governor was always talking about great job expansions, but not the ones that didn’t get followed through on, or the ones substituting menial jobs for more higher-paying ones,” Vargus said. “Is it politically motivated? In part yes. There’s no doubt about that.”
 

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  • Pay for Performance
    The IEDC want to only speak to how one program (EDGE credit program) works with pay for performance. They don't want to speak about the other hundreds of millions of other tax credits,industrial grants,training funds,property tax abatements, etc.. and how well they manage these programs.

    Suspect they just re-wrote the agreements when the companies failed to meet their obligations letting them keep taxpayer money.

    Similiar to the backdating scandal that hit corporate America on stock options that were intended to be shareholder payment for good performance. Ended up many Executives were cheating the system.
  • Show Me the Numbers!!
    Then use your influence with this dedicated, competent and loyal public servant to release those numbers. For you to pretend that these numbers are being kept secret for anything other than the political goal of Mitch Daniels and Brian Bosma to gain control of the IN House, is downright shameful, albeit predictable. If this Roob character is such a stand up guy, then tell him to level with Hoosiers and show us the numbers.
  • Band wagon jumper....
    It figures that Pat Bauer would jump on this band wagon after Channel 13 did all of the leg work. This job information should have been questioned by all of the political parties. Where are the jobs and how much tax money has been spent? Why Mitch Roob believe it is such a secret, beats the hell out of me. Heaven forbid another state might find out what we in Indiana are doing. Guess what.....we don't have the figures to back the job numbers. Who is kidding who?
  • Mitch Roob
    Speaker Bauer's concerns about losing control of the House of Representatives at the next election should be of paramount importance to him and his party. His "street brawl" brand of politics is certainly not what one would expect from the Speaker of the Indiana House of Representatives. Having personally worked with Secretary of Commerce Mitch Roob in crafting financial incentives to promote employment opportunities in north west Indiana, I can personally vouch for the Secretary's competence and dedication to keeping Hoosier's employed. His loyalty is undivided when it comes to promoting economic development for Hoosier communities.
  • Confused by the term
    Pat Bauer's job, as lead Democrat, is to shift State resources away from those who create wealth to those who don't.

    Heâ??s not doing anything wrong. The words "work" and "job" are really confusing to a lot of his constituents, so he's just looking out for their interest by attacking those involved in job creation.
  • Job Creation Numbers
    I applaud House Speaker Pat Bauer for trying to obtain the truth on job creation numbers in Indiana. I have been laid off since September 2009, sent out over 243 resumes with no luck. There are so many people unemployed that companies can pick and choose who they want. I worry now that the Federal extensions will not be extended. How is the economy going to react to 15M people with no money to spend? How can our elected officials sleep at night knowing they voted to take money away from the very people that voted them in office?

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