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June 12, 2012

The price of making rain

If you hear someone talking about dry spells in Logansport, they could be referring to brown lawns or the last time a new industry came to the city to expand the labor force.

In fact, it’s been about a decade since new industries were regularly springing up in the industrial park south of Logansport adjacent to the airport.

As for the lack of rain we’re experiencing this month, there was a time in the 1800s when “rainmakers” were paid to launch chemicals into the sky to seed clouds in hopes they would sneeze raindrops.

Whether it worked or not is debatable, and that’s why the process is considered anything but a sure thing.

The same could be said for trying to end local economic dry spells by paying consultants to make the skies rain jobs on communities like ours. In the last week, Logansport officials have approved $130,000 in tax dollars that will be used to somehow “enhance” economic development.

In fairness to one of the consulting firms, William-Lynn-James, it has successfully worked with the city for years in promoting the soon-to-be-completed Hoosier Heartland from the Ohio state line to Lafayette. Although current Mayor Teddy Franklin once questioned the amount of money Logansport paid for lobbying efforts by the company when other larger cities paid less, Logansport arguably had more to gain from a four-lane highway than Lafayette, Fort Wayne or even Peru because those communities already had four-lane access.

But paying consultants on retainer for economic development efforts is a bit different and not exactly a no-brainer. Here’s why:

1. Retainers. There’s a reason why consultants and lawyers like to be paid this way because they may not succeed in doing what you want them to do. If any consultant was paid based on the actual number of jobs directly created by his or her expertise, we would all want to pay them as much as we could. Unfortunately, it doesn’t work that way. Hiring consultants to represent your community or to work the economic development circuit is spinning a huge roulette wheel that may not have a winner when the wheel stops turning.

2. Priorities. One of the reasons why Logansport and other communities don’t go the way the city is going now is because consultants are beholden to many masters, as in clients. Clients who pay the most for services would understandably expect the most out of consultants for their money and would likely reap the best fruits of their labors. Using local revenue to enhance economic development efforts through the existing Logansport-Cass County Economic Development Foundation puts more fuel in the tank of an organization that is responsible to only one community — ours.

3. The Indiana Economic Development Corporation. One of the real reasons this type of local expenditure is questionable is that the state of Indiana is already expected to provide this kind of service for Logansport, Cass County and other Indiana communities. The corporation that was known previously as the Indiana Department of Commerce has launched trade missions to other countries, some of which have involved our own local officials. If the state can’t showcase shovel-ready industrial sites in strategic locations like Logansport, then state officials can’t pose for all those groundbreaking ceremonies in glossy campaign mailings we usually receive in even-numbered years.

4. What we have to show for our money. Realistically, what we may have to show for this $130,000 appropriation in 10 years is — pause for swallowing hard — nothing, zilch, natta, empty set, zero.

Meanwhile, if $130,000 could be invested in local infrastructure, property acquisition to expand the industrial park, funding to support entrepreneurs or an incubator building to facilitate businesses growing from garages to warehouses, we would at least generate tangible assets that are permanent investments we can build upon over the next decade.

5. Our fair share. There’s plenty of talk in Congress about the naughty word “earmarks” because that word connotes special favors for favorite contributors or communities. But the fact of the matter is that Indiana ranks 22nd in per capita return of federal tax revenue. Directing William-Lynn-James to use its Washington lobbying connections to secure what Logansport and Cass County have coming could yield a substantial return.

Per capita, every American represents an average of $8,520 in federal tax revenue, but in Indiana, the per capita average is only $6,724. In other words, if Logansport had its actual fair share of federal tax revenue, it would have $36 million more to work with than it has today. Add in rural portions of Cass County and that’s more than $70 million more for a community that is starved for funds to pay for basic public safety and community development.

Just one year of $70 million would likely demolish every condemned property in the county that’s not on the tax rolls and build a home, office or factory in its place, creating a more stable tax base for the city and county.

Are city officials doing the economic development equivalent of paying a rainmaker? In essence, the answer is yes.

We have to hope for rain and maybe even pray for it. But do we really have to pay for it?

• Dave Kitchell is a columnist for the Pharos-Tribune. He can be reached through the newspaper at ptnews@pharostribune.com.

 

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