Where, oh where, should we put our economic development resources? This question often goes unasked by economic development agencies. There are those who are philosophically opposed to answering that question. Others believe the answers are so obvious, it is not necessary to give voice to the issue.
We have free market advocates who believe firms should locate wherever they wish and economic development is best when not guided by government or private local interests. Alternatively, there are planners who believe that development should be guided to meet a community’s needs.
States and localities give tax breaks to specific businesses to encourage investments. This is basic real estate promotion similar to an apartment complex offering “free” rent for two months. Building a highway or installing sewers is less direct because many can benefit from those advances, but it remains property development.
Most jurisdictions are hesitant to be too directive. Many attempts at guiding where firms should locate have been unsuccessful; think Urban Enterprise Zones. Nonetheless, federal and state funds still pour out of Washington and Indianapolis designated for urban or rural purposes.
Where should the subsidies go? The U.S. Bureau of the Census reports only 18 Indiana counties in 2012 had median household incomes higher than the national average. Five of the top six are adjacent to Marion County (Indianapolis). Two others (Warrick and Posey) are next door to Vanderburgh County (Evansville). Porter County is part of the Chicago metroplex. Dearborn County cuddles up to Cincinnati.
Note: Other than Bartholomew County (Columbus), none of the top 18 counties is the center of a metropolitan area. This pattern is a result of reinforcing suburbanization with state and federal subsidies. Indiana widens I-69 to help Marion County workers live in Hamilton County. In Northwest Indiana, I-94 is widened to let wealthy workers living in Porter County have better access to high paying jobs further west in Lake County and the rest of Chicagoland.