Leo on CRED; State touts eco-devo success

The following two items create an interesting juxtaposition.

Leo Morris of the News-Sentinel writes an editorial today about the Indiana Economic Development Corporation providing only 10% of what Fort Wayne Newspapers was expecting to be a $2.5 million tax credit for construction of its new printing plant at Main and Van Buren in downtown Fort Wayne.

Meanwhile, the Indiana Economic Development Corporation issues a news release touting its success in economic development for Indiana.

From the news release:

"The numbers say it all. We have established a new model for economic growth, and that model is delivering," reported Michael S. Maurer, Indiana Secretary of Commerce.     Maurer and Nathan Feltman, vice president of the Indiana Economic Development Corporation (IEDC), released IEDC performance data for 2006, which shows that the public-private agency has surpassed 2005 commitments for job creation and private capital investment.

And a part of Leo Morris' editorial:

Until this week, it couldn’t have seemed simpler. Invest in one of the city’s two CRED areas – one at the Southtown Centre site, the other downtown – and you get a 25 percent income tax credit on the “qualified” investment as defined by state legislation. The city has been determining that “qualified” means the cost of construction, the criterion used for Menard’s and Wal-Mart at the Southtown site. Based on that understanding, Menard’s received an incentive of between $2 and $2.5 million, and Wal-Mart got one of between $2.5 and $3 million.

And based on the same understanding of the same criterion, Fort Wayne Newspapers, business agent for both daily city newspapers, should have received an incentive of $2.5 million for its new press facility, the first downtown CRED project to come online. But it was disclosed this week that the state had approved an incentive of only $250,000, quite a dramatic difference.

Comments

[Craig Ladwig]

Are there any other newspapers in Indiana that would give their editorial support to an economic-development scheme in exchange for $2.5 million in cash? I would like to see an editorial detailing exactly how many jobs and how much investment stayed in downtown Fort Wayne.

[Leo Morris]

So, Craig:

1. How do you differentiate an "economic development scheme" from government encouraging business instead of hindering it? You're against tax incentives now?

2. If you think I would ever attach my name to anything for any other reason than that I believe what I'm writing, have the guts to come out and say so.

[Craig Ladwig]

In answer to your questions:

1) Yes, I am against tax incentives now, before and forever; they require government to pick winners and losers in the market, something it is demonstrably inept at doing. Also, there is no empirical evidence that it "encourages" economic growth in any way short of stepping totally out of the way.

2) And no, I don't think you would attach your name to something for any other reason than you believe what you are writing, assuming you know what you are writing.

However, if you are asking for a demonstration of "guts," I would say that for a decade or two your positions on those issues of particular importance to your employers, who, lest you forget to tell your readers, are heavily, perhaps fatally, invested in downtown property, as are the friends who win their political endorsement year after year on your page, have fallen predictably into a career-salvation pattern. In this regard, you are pretty much like the rest of us. But how are the rest of us to explain a Libertarian who has not been moved to shout out against government consolidation, forced annexation or preferential tax treatment for select property owners?

If, on the other hand, you are making the claim that you have been sitting at 600 West Main Street, amidst a group of self-interest corporate suits, boosters and occupiers, calling each shot as you see it, proclaiming the truth at every opportunity and the consequences be damned . . . well, you have had an incredible string of good luck.