The Journal Gazette
Tuesday, December 12, 2017 1:00 am

Regional Cities study has its skeptics

Ball State review positive, but some say it's too early

SHERRY SLATER | The Journal Gazette

It's too soon to know the full effects of Indiana's Regional Cities Initiative, but an initial study released Monday by Ball State University researchers show the investment is making a measurable, positive difference.

Eric Doden, Greater Fort Wayne Inc.'s CEO, said the study shows “the progress and momentum” in the three regions chosen to receive $122 million in grants going toward $1.2 billion in total investment.

“We are all creating the conditions to attract talent and capital to build our community into a nationally recognized economy,” he said in a statement.

Whether researchers at Ball State's Center for Business & Economic Research have enough data to draw reliable conclusions are a matter of opinion, however.

Two skeptics questioned assumptions made in the study and whether anything but a glowing report was possible, considering who paid for the work.

Ball State was commissioned by the Metro Chamber Alliance to review the state's $122 million investment in 64 projects in three regions of the state: northeast, north central and southwest.

The Metro Chamber Alliance comprises the chambers of commerce of Indiana's largest cities and various regions, including Indianapolis, Fort Wayne, South Bend and southern Indiana.

The Regional Cities Initiative was designed to fast-track bold projects that improve quality of life, making regions more attractive to talented young workers. Former Gov. Mike Pence and the Indiana Economic Development Corp. created the program in 2014. The General Assembly agreed in 2015 to fund three $42 million grants.

According to IEDC-issued guidelines, the ideal breakdown for funding projects would be 20 percent state government, 20 percent local government and 60 percent private investors.

By using Regional Cities grants as the final dollars to push proposed projects over the funding finish line, state and local economic development officials say they have been able to spur $835.5 million in private-sector investment, $251 million in local investment and $35 million in other state funds for a total of more than $1.2 billion in projects. 

It's impossible to know how many of those projects might have been completed even if Regional Cities grants weren't secured, however. Money could have come from other sources or some projects could have been downsized to fit within tighter budget constraints.

Officials who assembled northeast Indiana's winning proposal determined that population stagnation is the single biggest threat to the region's economic development. Increasing population was the primary goal of each of the three winning submissions, officials said.

Using a complex mathematical equation, the researchers projected that Regional Cities-related investments initially will attract 7,960 new residents to the three participating regions.

Morton Marcus, a retired Indiana University economist, didn't review the Ball State team's model for making population projections. He believes any methodology can be criticized, so he steered clear.

But he confessed to having mixed feelings about the Regional Cities Initiative. Although it's good to think regionally, Marcus said, he's not sure the program is supporting the right projects.

Marcus believes the separate cities and counties that make up a region need to be connected – by roads and high-speed internet – to act as one entity. But the Regional Cities legislation singles out roads and high-speed internet as upgrades that cannot be paid for with the grants.

“If I were going to have a Regional Cities program, I would look at how to connect these regions together,” he said.

Tom Lewandowski, another frequent critic of economic development strategies, also didn't bother to read the report before raising some issues with its conclusions.

“It's the typical smart-people-in-smart-suits approach to things,” he said. “The first question is always: Who paid the researcher?”

Lewandowski, executive director of The Workers' Project, a local nonprofit dedicated to helping workers have a voice in their workplace, said he's not surprised that economic development officials applauded the positive report card for Regional Cities.

“I'm glad it's working for them. What about us?” he asked, referring to working people.

Some critical assumptions were made when projecting how many people will move to Indiana in the next few years, Lewandowski said.

By calculating how many people might be attracted to the Hoosier State following the investment, the study doesn't take into account similar investments being made in Toledo; Chicago and Beijing, he said.

Regional Cities investment “isn't done in isolation,” Lewandowski said. “How many things are going on in communities that are just as good – or better?”

Hicks couldn't be reached Monday evening to confirm whether researchers were able to factor other cities' investments into their population projections.

Marcus, the IU economist, wondered about the timing of the first piece of the multipart Ball State study, considering that many of the Regional Cities projects aren't finished – including some that haven't broken ground.

But the timing works for the program's supporters, he said, “especially if you are looking for space in the newspaper during a slow time of year.” 


State sees record number of tourists

Indiana attracted a record 79 million tourists last year, a 2 percent increase from 2015, according to study results the Indiana Office of Tourism Development released Monday.

Tourism spending added a record $12.2 billion to the state's economy last year and supports more than 242,000 jobs annually, according to the study by Rockport Analytics, an independent market research and consulting firm.

Indiana's tourism spending increased 5.7 percent in 2016, outpacing increases reported in surrounding states: 2.4 percent in Ohio, 1.8 percent in Illinois and 5.1 percent in Kentucky.

Tourism is defined as an overnight stay or a trip greater than 50 miles each way that is not part of a normal routine.

Source: Indiana Office of Tourism Development

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