Two Indianapolis Democrats are asking for more legislative oversight of the Indiana Economic Development Corp., which is seeking an annual $300 million deal-closing fund in the next two-year budget cycle to encourage businesses to set up shop or expand in Indiana.
The comments from Rep. Greg Porter and Rep. Ed DeLaney, both of whom serve on the State Budget Committee, came Thursday during a presentation to the committee of the governor’s recommended 2023-2025 budget. But Republican leaders have downplayed the concerns, arguing that the IEDC needs flexibility to attract new business and noting that the state secured a record $22.2 billion in capital investment commitments from businesses last year.
With the support of Republican Gov. Eric Holcomb, the IEDC is also asking the GOP-dominated Legislature for a one-time injection of $150 million for a revolving loan fund for site acquisition, greater flexibility to award tax credits and $500 million in additional state funding for the regional READI grant program, which is administered by the IEDC.
Last year, the State Budget Committee and Office of Management and Budget allocated $240 million to the IEDC for land purchases, including $164 million to purchase 1,400 acres for the planned LEAP innovation district in Boone County and $76 million for the Elanco project at the former GM stamping plant in westside Indianapolis. And during the 2022 legislative session, lawmakers passed Senate Bill 361, which gave the IEDC $300 million in one-time funding to help close deals.
“We have just continued to give them a blank check,” said Porter, the ranking minority member on the House Ways and Means Committee. “To me, there’s no real accountability.”
IEDC officials have said the proposed $150 million revolving fund will allow the agency to purchase land without having to return to the State Budget Committee for approval, but Rep. Delaney voiced concerns that the IEDC was operating without enough legislative oversight.
“I share with Rep. Porter his concerns about the latitude given to the IEDC,” Rep. Delaney said. “I think this is excessive.”
The IEDC has argued that it needs the flexibility and agility provided by such funds to close deals and compete with other states that have similar funding mechanisms. The IEDC is a quasi-governmental agency formed in 2005 under then-Gov. Mitch Daniels to provide greater flexibility to attract new employers and create jobs than its predecessor, the Department of Commerce.
Sen. Ryan Mishler, a Republican from Mishawaka who chairs the State Budget Committee and the Senate Appropriations Committee, brushed off concerns that the agency was acting without enough scrutiny.
“In this last budget, in the capital projects piece, anything the legislature didn’t appropriate, they could bring in front of us to review,” Mishler, one of the authors of Senate Bill 361, told reporters following the hearing. “That left it a little open-ended, and I think that’s where the concern was–that it took it away from the legislature and brought it to the budget committee, which isn’t the full legislature.”
At a budget presentation last month, IEDC chief operating officer David Rosenberg said the $300 million in deal-closing funds provided last year were very helpful but more is needed.
“We have committed almost that entire fund not even halfway through our fiscal year,” Rosenberg explained. “The demand remains high for the next year with over $100 billion in potential deals in the pipeline, and we need to continue to make investments in this fund to meet the demands of the market.”
Lawmakers return to the Statehouse on Jan. 9 and have until April 29 to approve a budget.