What do you do when you have little discretionary money and enormous challenges? You might follow the example being set by Mayor Greg Goodnight in Kokomo.

Yes, Kokomo, the city named for a Miami chieftain, is known nationally through a song by the Beach Boys (which referred to the former name of a Caribbean island) and panned statewide for the string of traffic lights on the infamous Kokomo Bypass.

Kokomo enjoyed being the place with the highest average wages in Indiana, but recently has ranked behind only Elkhart in distress from the recession. As a center of production for Chrysler Corp. and Delphi Corp. (both based in Michigan), Kokomo has shared the glitter and the tarnish of the American automobile industry.

Like every other Hoosier mayor, Goodnight fights the battle of the budget. In response to the disastrous financing policies of the General Assembly, he reduced city employment and trimmed services. To do this, he closed the city’s day care center, shifted ambulance service from the fire department to the hospitals, and requires homeowners to move their trash cans to one side of the street for pickup.

The mayor’s opponents probably fantasize that this last measure will be revoked when the first sweet old lady is run down on a dark, icy winter morning while struggling with her mammoth garbage receptacle. Normally, her daughter would have moved the can, but without the city day care center, the grandchild must be taken to a more distant facility. The tragedy will be complete if the old woman would have survived but for the elimination of the city’s ambulance service.      

Goodnight understands that Kokomo’s economic problem is not the dominance of Chrysler and Delphi and the lack of diversification in the economic base. The central problem is that Howard County (of which Kokomo has 55 percent of the population), does not retain the earnings of its best-paid workers. Twenty percent of the work force lives outside Howard County; this 20 percent earns 30 percent of the income generated in the county.

Kokomo and Howard County must attract more well-paid workers to live there. This will improve the retail and service options in Kokomo. Generally, higher-income families have high expectations of schools. Their housing will add to the tax base as their skills add to the innovative capabilities of the community.

Goodnight is opening eyes with his program to make downtown Kokomo more friendly and attractive. “The City of Firsts” (as Kokomo likes to call itself) is being transformed into The City of Color. Flowers bloom in baskets hung from decorative light poles. New planting areas have been created at street corners. Modern sculptures catch the attention of drivers and pedestrians. Many traffic lights have been replaced by stop signs, which facilitate movement for autos and walkers while discouraging high-speed adventures through town. Some one-way streets are now two-way passages, slowing traffic so motorists can see the many changes being made to local shops.

City parks are getting new equipment and bike/walking trails are being constructed. Efforts to coordinate and promote the arts are being advanced. Even the headquarters building of the Kokomo Fire Department is undergoing a thorough exterior cleaning, removing the grime of three decades.

These are major achievements for a city on a strict financial diet.

Contrast this modest program with the massive, expensive construction being done by the state that will have little benefit for Kokomo. U.S. 31 runs along the east side of Kokomo. Its many traffic lights form a major obstacle to vehicles moving between South Bend and Indianapolis. Instead of fixing the problem, the state Department of Transportation chose to build a new four-lane highway farther east of Kokomo. This invites more suburban sprawl and a relocation of retail trade from the old bypass.

Fixing the bypass would have been more expensive, but modernizing U.S .31 on its current alignment might have been a wiser investment with more benefits to Kokomo than a new bypass.•

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Marcus taught economics for more than 30 years at Indiana University and is the former director of IU’s Business Research Center. His column appears weekly. He can be reached at mmarcus@ibj.com.