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Indiana agency deemed effective without a check for results

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INDIANAPOLIS (AP) A new study declares Indiana's business-recruitment agency is effective even though the researcher noted he didn't review how many jobs were actually created by companies receiving state assistance.

The study looked at various services the Indiana Economic Development Corp. offers to companies, including reviews of how much state money was spent on services, such as workforce preparation and tourism, and the geographic distribution of economic projects, Michael Hicks, director of Ball State's Center for Business and Economic Research, told The Indianapolis Star.

Hicks said the $85,000 study wasn't intended as a job-creation audit and pointed out companies can only collect state tax credits based on hiring of employees.

"I don't know that 90 percent of those, or 105 percent of those, or 65 percent of those actually show up," Hicks said. "I'm not sure what that says. And the reason is, the incentive structure in Indiana doesn't really provide the incentive to lie, to mislead about that."

The quasi-governmental development agency has been criticized for not requiring companies that receive tax incentives to disclose how many jobs they've created. The Republican-controlled General Assembly this year turned aside a proposal that would have required each company receiving state incentives to submit annual public reports on hiring and investments.

Development agency spokeswoman Katelyn Hancock called the Ball State study "a managerial review of the organization overall" and not an analysis on the effectiveness of its tax incentives.

Some critics questioned the value of the study.

"I don't think that a study that is based on press releases tells the story," said Morton Marcus, retired director of Indiana University's Indiana Business Research Council. "If you don't have a decent audit of the IEDC, you can't tell what they're doing."

The development agency uses an independent auditing firm to produce a "jobs realization" report, which says Indiana saw 78,403 new jobs in 2012, or almost 92 percent of the total new jobs anticipated through IEDC projects.

But the agency has declined to detail how many people have been hired at each company that receives tax incentives, compared to how many jobs were promised.

The Ball State report also praises the IEDC for being "one of only two states with clear mission statements" and for fully implementing a public-private partnership structure. The Indiana agency has about 65 employees, compared to several hundred in the economic-development agencies in Ohio, Michigan and other states, Hicks said.

 

Posted 10/23/2013