Monday, December 03, 2012

Indiana Gives Away A Lot Of Money To Businesses According To New York Times: Incentives Represent 6% Of State Budget

The New York Times did something it's done too little of in recent years: Good journalism. The newspaper compiled data detailing how much state and local governments nationwide spend on incentives to businesses. What it found is that state and local governments are giving away a staggering $80 billion each year to businesses. The Times has also created a useful online database that allows you to see a state-by-state analysis, which details per capita spending and budget percentage, as well as the recipients of business incentives, including the amount of money they received. According to the Times' figures, Indiana spends $142 per capita on state incentives, which represents 6% of the state budget. Metal Technologies of Auburn is identified as the top recipient of incentives, receiving $35.2 million. Several Indianapolis businesses ranked near the top, including EnerDel ($21.3 million), Arcadia Resources ($17.8 million), ExactTarget ($15.1 million) and Angie's List ($14.2 million).

The Times' analysis had this finding that will come as no surprise to critics of government picking winners and losers in the business world: "Yet at least 50 properties on the 2009 liquidation list were in towns and states that had awarded incentives, adding up to billions in taxpayer dollars, according to data compiled by The New York Times." The data would have been more useful if the Times had tracked political contributions by businesses and individuals applying for these incentives across the board. Instead, it singled out a red state, Texas, which is controlled by Republicans, to give the appearance that sort of thing only happens in Republican states. Other news organizations have found a direct correlation between various federal incentives handed out by the Obama administration over the past four years and contributions those applying for federal aid had made to Obama's presidential campaign. That's the Chicago Way, after all. The Times will probably continue to ignore that major political scandal.

The Times' data, while somewhat helpful, is not without flaws, a fact acknowledged by the report: "A full accounting, The Times discovered, is not possible because the incentives are granted by thousands of government agencies and officials, and many do not know the value of all their awards. Nor do they know if the money was worth it because they rarely track how many jobs are created. Even where officials do track incentives, they acknowledge that it is impossible to know whether the jobs would have been created without the aid."

As examples of the flawed data, the Times identifies a $10 million incentive offered to LiteBox. As we all know now, Gov. Mitch Daniels and Mayor Greg Ballard were tricked by that company's founder, a man with a checkered past, into making a big public announcement on his plans to build large, multi-media, mobile video walls attached to semi-truck trailer beds. The state and city lost nothing because the company sort of just faded into the sunset without breaking ground on the project and never received the pledged incentives after the media started asking tough questions economic development professionals failed to ask of it before the announcement. I also noticed that very well-publicized public giveaways by the City of Indianapolis totalling in the tens of millions of dollars to billionaire Herb Simon's Indiana Pacers and Ersal Ozdemir's Keystone Construction, for example, aren't listed in the database. 

1 comment:

Marycatherine Barton said...

Legislators from both parties are equally guilty in liberating money from us taxpayers for their crony business interests. No wonder Ventura calls these two gangs, the Democrips and the Republithugs