Indiana jobs announcements, with a grain of salt
Yesterday, Governor Mitch Daniels and the CEO of the Indiana Economic Development Commission (IEDC) announced deals with 9 different companies to bring 2,500 jobs to the state over the next 6 years. About 1,500 of those jobs will come from three Indianapolis-area technology companies: Angie’s List, ExactTarget, and BidPal.
With these announcements, the IEDC breathlessly proclaimed:
Today’s news comes amidst the state’s record breaking year of economic development results. This year, the Indiana Economic Development Corporation has already worked with 251 companies that have made decisions to expand or establish operations in Indiana, outpacing the 219 decisions by companies announced at year-end last year and every other year on record. The 251 companies anticipate investing $6.57 billion in their Indiana operations and creating 27,858 new jobs in the coming years.
This is good news for Indiana. Our job growth rate is finally increasing, despite the fact our state’s unemployment rate remains stuck just barely above the national average at 8%. According to the seasonally-adjusted non-farm payroll numbers, the number of Hoosiers working still trails where we were at this time of year in 2008; while we’ve come a long way over the last 3 years, we’ve still got a ways to go.
But these jobs could come with a price tag attached. Despite IEDC CEO Dan Hasler’s bragging that Indiana offers less in terms of incentives than the rest of the region, these companies featured yesterday are still lined up to receive up to $31 million of taxpayer money. For its $1 million expansion, Angie’s List could receive “up to $7 million in performance-based tax credits and up to $200,000 in training grants,” according to the Indianapolis Business Journal. ExactTarget could get up to $10 million, while BidPal could receive $2.2 million plus “additional property tax abatements” from the city of Indianapolis. Indianapolis’ WTHR reported that,”State leaders say if companies fall short, they won’t get most of that money. So far this year, Indiana has taken back more than $5 million from companies that got state incentives, but did not create the jobs they promised.”
At the very least, it would seem that Mitch Daniels’ team did a better job of vetting the companies involved in this announcement, after last year’s Litebox debacle. In that announcement, Daniels and Indianapolis mayor Greg Ballard promised 1,100 jobs from the unknown company, in exchange for $10 million in performance-based tax credits and training grants.
In the past, as many as 40% of the jobs promised by the IEDC have never materialized. When WTHR followed up on IEDC’s press conferences and showy “success” reports in 2010, they found “empty fields and deserted factories where the state claims there are supposed to be thousands of jobs.” And even the cleaned-up, audited numbers from the IEDC omitted hundreds of companies the agency had previously claimed credit for bringing to Indiana.
On a related note, Chrysler is seeking incentives to build transmissions in a vacant Tipton facility. That plant has a troubled history:
The plant, which is about a half-hour south of the company’s transmission plants in Kokomo, never has been occupied. Chrysler partnered with Getrag Transmission of Germany in 2007 to build the plant, which was to employ 1,200 and make dual-clutch transmissions. But that partnership unraveled the next year, halting construction of the plant.
In 2010, W.W. Reynolds, a real estate developer, bought the building out of bankruptcy for $25 million and planned to lease it to Abound Solar Inc.
Loveland, Colo.-based Abound had hoped to hire 1,200 workers at the plant to make solar panels. But Abound crashed into bankruptcy this summer and now is liquidating.
The Getrag plant was announced as bringing 1,400 jobs to the state, while the Abound plant was supposed to create 850 Hoosier jobs by 2013.
Let’s hope yesterday’s jobs announcements mark a more hopeful path.
- “As Companies Seek Tax Deals, Governments Pay High Price”, Louise Story, New York Times, 12/1/2012
- “Reality Check: State wants to keep job numbers secret”, Bob Segall, WTHR.com, 5/26/2010
- “Indiana to clean up job numbers”, Bob Segall, WTHR.com, 6/25/2010
- “Reality Check: Indiana job numbers don’t add up”, WTHR.com, 3/1/2010