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The IEDC developed a state-led incentive package totaling $445 million for Stellantis, for a $2.5 billion electric-vehicle battery plant in Kokomo, which is expected to open in 2025 and create up to 1,400 jobs, which has since moved the operation into a holding company called StarPlus Energy LLC. The package includes $187 million in direct benefits for the company across varying incentive types, along with $258 million in redevelopment tax credit loans for infrastructure and other to-be-determined uses. The subsidy package for the Stellantis plant in Kokomo equates to $132,000 PER JOB!!
Earlier this year, Indiana lawmakers signed off on another potential megadeal. The Indiana Economic Development Corp., the state’s quasi-governmental economic development organization, offered a $120 million incentive package for an unnamed auto-parts maker looking to construct a $3.2 billion manufacturing facility in north-central Indiana that will employ an estimated 1,400 workers. That equates to the state paying roughly $85,000 PER JOB!!
Minnesota-based semiconductor manufacturer SkyWater Technology is building a $1.8 billion R&D and production plant adjacent to the Purdue University campus in West Lafayette. The project is expected to result in 750 high-wage jobs within five years of opening, according to the IEDC, which plans to support the project with more than $76 million in incentives—about $101,000 PER JOB!!
David Rosenberg, the newly appointed (NOT ELECTED) secretary of commerce who also acts as CEO of the IEDC, said the amount and types of incentives vary depending on the nature of the project. Every negotiation is different and each project unique, and the IEDC works closely with companies and local officials to determine the needs of a company. “It’s important to remember that these incentives are based on what the state sees as a return, and so they’re calculated based on what the company will pay in taxes over a certain period of time,” Rosenberg told IBJ. The IEDC declined to share how incentives were calculated for specific projects, but a spokesperson said the agency’s business development team, before any incentives are offered, conducts “a robust risk, legal and financial due-diligence review, a weighted deal scoring, a cost-benefit analysis, and an internal rate-of-return analysis that are considered alongside a project forecast.”
Local subsidies, which are required under IEDC policy, take money directly out of local government efforts to reduce crime, improve schools and improve quality of life. The state incentives take money directly from funding the key public services that attract residents and non-manufacturing businesses.
Municipal leaders are concerned their cities or counties could lose out on big deals because of the state’s vested interest in seeing its own sites succeed.
The IEDC publishes annual reports that detail how much private investment and job commitments it has secured, but because the agency is quasi-governmental, it doesn’t have to release certain data points. “There’s just so much that we don’t know,” said Stephanie Wells, executive director of the Indiana Fiscal Policy Institute.
Economic development leaders have long argued that manufacturers want “shovel-ready” sites where they can begin building without having to acquire land themselves or tangle with local zoning boards. In response to this trend, the IEDC has embarked on a strategy of buying up large swaths of land and creating “megasites” to attract global manufacturers.
The LEAP Lebanon Innovation and Research District under development in Boone County represents a shift in the way the state is working to attract companies and create jobs. The change is meant to help Indiana compete for the nation’s biggest high-tech economic development opportunities. Rather than letting local governments take the lead in planning a shovel-ready project that the state would then market, with LEAP, the IEDC has taken on the responsibility for acquiring land and master-planning the site.
How is it legal for an unelected group of business people to overtake an entire community's power?
IEDC officials say they’re also looking elsewhere for opportunities to deploy the LEAP concept, as well as separate tools like single-project Innovation Development Districts that allow the state to capture state and local revenue to fund improvements and incentives at the sites. 👀
So Indiana has just decided to take away all local authority and decision making power regarding how they want their community to develop. And on top of that, they are going to steal our money to pay for it.
In the most recent state budget, lawmakers gave the IEDC unprecedented levels of funding, including $500 million for a deal-closing fund; $500 million for READI 2.0, a third wave of regional economic development grants; and $150 million for a revolving site-acquisition fund.
In early 2022, the IEDC began the process of secretly buying up large swaths of land in Boone County for a manufacturing and innovation district, dubbed the LEAP Lebanon Innovation District, on what is mostly farmland (LEAP stands for Limitless Exploration/Advanced Pace). In June, legislators approved the IEDC’s request for $122 million to acquire roughly 1,000 acres of land in the district for a potential $50 billion semiconductor plant investment.
The Lilly project at LEAP Lebanon is expected to be the state’s first Innovation Development District, with up to $271 million in tax rebates for the company’s investment, which is the single-largest incentive ever given by the IEDC.
Re: Potential new Subaru EV plant - When asked about a potential deal, an IEDC spokesperson said the agency “can’t confirm or comment on any discussions” and that “all negotiations are confidential.” Besides its Lafayette plant, Subaru of America is also planning to open a parts distribution facility at a 1.1-million-square-foot warehouse in Zionsville.
In June, state budget leaders approved $120 million in incentives for an “advanced technology automotive components” facility. The IEDC declined to reveal details about the company, except to say the plant would be located somewhere in north-central Indiana.
Again, how is it legal for a group of unelected people to have so much power, use OUR tax dollars & enjoy such high levels of secrecy? If it’s our money, don’t we have a right to know how it’s being spent?
Aside from its LEAP strategy, the IEDC has an ever-growing economic development toolbox. Among the most pivotal when it comes to megadeals—generally anything exceeding $1 billion in capital investment—is the Innovation Development District designation created in 2022 through state legislation.
Innovation Development Districts allow the state to draw boundaries around specific projects and capture incremental growth in income, sales and property taxes that result from the projects. That money can then be used to offer companies rebates for hitting target employment and production thresholds.
The Innovation Development Districts are similar to tax-increment-financing districts, except the latter are locally designated and controlled and capture local property tax revenue that can be used for incentives and improvements in the area.
The Innovation Development District would funnel most of the siphoned-off tax revenue to the state, which would control how it’s spent, with a much smaller portion designated for local governments.
So they are literally taking local property and claiming it is now owned by the state instead!
The IED Foundation, created shortly after the IEDC by IEDC themselves, and the Indiana Economic Development Corp. share the same staff and 12-member board of directors, as well as “the same mission”.
State lawmakers allocated over a billion dollars to the IEDC over the next two years. The Foundation, however, is able to accept private donations, supplementing the IEDC’s funding appropriated by the Indiana General Assembly and enabling the IEDC to pursue its goals more aggressively. Ten donors gave the foundation about $2.7 million from 2020 through 2022, according to its records.
“Private donations to the Foundation allow more flexibility in how we use the funds and how quickly we’re able to access them, meaning we’re able to move quickly,” IEDC Spokeswoman Sweitzer wrote. The foundation’s expenditures aren’t public records, according to Lang, the counsel. He said that’s because the funds are private, not taxpayer dollars.
The corporation’s site, which includes a page for the foundation, features a thank-you note to foundation “sponsors.” They include the state’s “big five” investor-owned utilities: AES Indiana, CenterPoint Energy, Duke Energy, Indiana Michigan Power and the Northern Indiana Public Service Company
Report: Privatized State Development Agencies Create Scandals Instead of Jobs
(October, 2013)
Analysis of Arizona, Florida, Indiana, Michigan, North Carolina, Ohio, Rhode Island, Texas, and Wisconsin gives other states roadmaps to avoid
Washington, DC – Three years ago, newly elected governors in several states decided to outsource economic development functions to “public-private partnerships” (PPPs). Together with a handful of other states’ PPPs, these experiments in privatization have, by and large, become costly failures characterized by misuse of taxpayer funds, conflicts of interest, excessive executive pay and bonuses, questionable subsidy awards, exaggerated job-creation claims, lack of public disclosure of key records, and resistance to basic oversight.
“Things have gotten demonstrably worse in the past three years. We conclude that privatizing a state development agency is an inherently corrupting move that states should avoid or repeal,” said Greg LeRoy, executive director of Good Jobs First and lead author of the study. “Taxpayers are best served by experienced public-agency employees who are fully covered by ethics and conflicts laws, open records acts, and oversight by auditors and legislators.”
Based on this persistent pattern of abuses, the report concludes that the privatization of economic development agency functions is an inherently corrupting action that states should avoid or repeal. With the “economic war among the states” already dominated by corporate interests and bargaining dynamics made worse by a long-term drop in job-creation deals, taxpayers are best served by experienced public-agency employees who are fully covered by ethics and conflicts laws, open records acts, and oversight by auditors and legislators.
The Indiana Economic Development Corporation has faced continuing criticism over its job creation claims. Triggered by tenacious investigative reporting by Indianapolis TV station WTHR, a state audit found that more than 40 percent of the jobs promised by companies described by IEDC as “economic successes” had never materialized. IEDC was also rocked by allegations that its representative to China solicited bribes from companies.
A more detailed report on the findings about the IEDC can be read here.
READI 2.0 -Even more of our money to business
- Indiana cities dishing out thousands to get out-of-state workers to relocateMakeMyMove requires participating municipalities to have some sort of local sponsor, such as the mayor’s office or a local economic development organization. The Indiana Economic Development Corporation (IEDC) then provides “some backstop and political support — to sort of show that the state is behind this,”
In April 2022, Indiana lawmakers greenlit Senate Enrolled Act 361 that allows city leaders to secure funding for talent attraction and retention activities through local tax increment financing dollars.
In 2022, the IEDC provided $1.5 million in matching funds for Indiana mayors and economic development corporations to use to bolster their talent recruitment and retention initiatives. Given the program’s popularity, the IEDC then added another $1 million to the matching fund element.
Museum passes, concert tickets, coworking spaces and thousands of dollars in cash are enticing hundreds of high wage earning families to relocate to Indiana — and even more are expected to make the move as a growing incentive program continues to expand.
The state and local governments are offering up millions to entice remote workers to move to Indiana. Some things being offered include cash incentives, mortgage rate reductions, seats on boards of local non-profits, sporting event season passes, memberships to the chamber of commerce, VIP concert passes, etc. The Mayor of Monticello even helped one potential mover get their Mother’s Medicare and medical benefits sorted out.
So the state is bribing rich people to move here with cash, board positions and free exclusive access to things most of us will never get invited to - and they are using our money to do it?
Some Indiana and Federal Money Info:
One component of the CHIPS Act offers $13 billion for regional technology and innovation hubs, and Indiana is directly competing with its Midwestern neighbors for one of three planned hubs in the region.
Heartland Bioworks, a consortium of Hoosier stakeholders in the fields of advanced manufacturing and biotechnology, submitted an application to the U.S. Economic Development Administration for official designation, which would make it eligible for up to $75 million in federal funding.
Under a provision of the Inflation Reduction Act, some factories making batteries for electric vehicles will each receive more than a billion dollars PER YEAR from the U.S. government, with no requirement to pay good wages to production workers. Thanks to the Advanced Manufacturing Production Credit (also known as 45X), battery companies will receive tax credits that they can use, sell, or cash out.
The 45X program alone will cost taxpayers over $200 billion in the next decade, far more than the $31 billion estimated by Congress’s Joint Committee on Taxation. On top of 45X and other federal incentives, factories manufacturing electric vehicles and batteries have also been promised well over $13 billion in state and local economic development incentives in just the past 18 months. The federal tax credit has no job quality requirements for permanent jobs and doesn’t mandate companies pay market-based wages or benefits.
Good Jobs First did the math for five recently announced battery factories. Here’s what we learned:
Total subsidies will range from $2 million to $7 million PER JOB!!!
Average annual wages, as announced, will be below the current national average for production workers in the automotive sector.
The 45X credit alone is large enough to cover each facility’s initial capital investment cost and wage bill for the first several years of production.
For example, Ford Motor’s new $3.5 billion battery plant in Marshall, Michigan, will be eligible for an estimated $6.7 billion in federal 45X tax credits. State and local governments have already awarded it an additional $1.7 billion in subsidies. The company has promised to create 2,500 new jobs that it says will pay an average annual wage of just $45,000 a year, while reaping subsidies of $3.4 million PER JOB!!!
In 2018, Indiana state lawmakers created the Governor’s Workforce Cabinet, a group of business executives, education leaders, government officials and other stakeholders responsible for distributing funds to Indiana’s 12 workforce development boards. In the most recent state budget, lawmakers allocated $16 million to the cabinet to spend on workforce initiatives.
And the Indiana Department of Education is in the process of rolling out a program that allows eligible high school students to receive up to $5,000 for “career scholarship accounts” to “shop” for work-based learning experiences to help them earn a post-secondary credential before graduation.
Sources
https://www.ibj.com/articles/state-considers-adding-leap-districts-beyond-lebanon
https://www.insideindianabusiness.com/articles/report-subaru-considering-indiana-for-ev-production
Elevate Ventures is a state-funded nonprofit created in 2011 through a contract with the Indiana Economic Development Corporation (IEDC), which receives money from the state legislature to support economic growth. Rather than building infrastructure or funding public services, IEDC channels millions to Elevate to act like a venture capital firm — investing in high-growth startups and running entrepreneur training programs. Elevate uses public money to make private investments, but because it’s set up as a nonprofit and not a state agency, it operates with minimal transparency, limited oversight, and no obligation to return profits to taxpayers.
The justification is economic development — the idea that betting on startups will create jobs and boost future tax revenue. But in reality, most startups fail, Elevate’s financial reporting is self-selected and unaudited, and there’s no public accountability for who gets funding or why. Meanwhile, critical programs and services go underfunded. Elevate keeps any profits it makes, pays its staff with public dollars (including $500,000 salaries), and refuses to fully open its books. So taxpayers take the risk, but don’t share in the reward — and are left in the dark about how their money is being used.
The compensation for just the top eight staffers in Elevate – which was formed with public dollars and is funded to the tune of $6 million annually by IEDC – topped $2 million in 2023, the last year for which information is available from the Internal Revenue Service. This $6 million amount is $1 million more than the preliminary state budget bill annually designates for the Healthy Families Indiana program.
You can’t say “we’re broke” and then write massive checks to a nonprofit to gamble on risky startups.
You can’t claim to be “limited by the budget” when you’re voluntarily funding private ventures with public money.
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