Kokomo Tribune; Kokomo, Indiana

Columns

March 20, 2014

Ladwig: The next-worst economic-development program

Tens of thousands of tax dollars are awarded each year to select businesses in facade grants

Now that the Legislature has agreed to let our friends at Ball State University regularly evaluate the effectiveness of the various tax “incentives,” here is a nomination for the next-worst economic-development program.

Popular throughout Indiana, it is called a “façade” grant. Tens of thousands of tax dollars are awarded each year to select businesses to dress up their exteriors. We like them not because they work but because they demonstrate what city hall thinks of you (not much).

The name itself is fair warning. Façade is of course French, the language of a people who reduced liberty, the noblest stirring in the human breast, to a basketful of guillotined heads. The portent could only be clearer if there were a collateral reference to Gen. Grigory Potemkin and his fake Ukrainian villages.

But we risk slanting our little report; let one mayor present the program in its best light:

“Our Commercial Façade Grant program helps local businesses invest in our community and provide welcoming atmosphere for their customers. This program ensures that our commercial corridors remain vibrant so that our citizens have convenient access to goods and services they need.”

Mayors throughout Indiana, noticing ragged storefronts here and there, conclude that commercial property owners are indifferent to how their property looks. Progress requires an outside incentive (government money) to get them to attract customers and make profits.

But what if Hoosier businessmen already know that? What if they understand that the appearance of their business is important to bringing in customers and making money?

That would mean something else is interfering with our commercial ideal. May we make a suggestion? How about taxes, regulations and zoning restrictions that have built up over the years on those distressed properties — all of them the result of bad government decisions detached from either market forces or customer preferences, decisions that can ruin even the most thoughtful business plan.

And if that were the case, the grants would be good money thrown after bad. In my city that means almost $3 million “leveraged” by more than 60 businesses over five years.

With that kind of investment, Indiana should look like Las Vegas. It doesn’t because a new facade in itself cannot significantly move a bottom line. Again, if it could, the owner would have made that investment long ago.

Rather, those “commercial corridors” targeted by the mayors contain a high proportion of aged business whose problems are the mayors themselves, i.e., their anachronistic taxes, regulations and other self-defeating economic policies.

And because government will continue to plunder — that is its business — those same commercial corridors will be in distress again in a few years. New facade grants will have to be awarded. It is a perpetual ribbon-cutting ceremony.

Finally, the typical city hall is inept at selecting those businesses where its help would help. One of my mayor’s first grants this year, for instance, was to a heating and air-conditioning company (in a heavily Democratic district, interesting enough). It is a business that draws its customers from phone and Internet listings, most of them never setting eyes on a façade, renewed or otherwise.

Considering the conflicting assumptions of façade grants and their obviously self-serving political structure, it is tempting to indulge in a flippant critique. It must be said, nonetheless, that in a public-policy sense the program is plain silly.

Better to post signs outside distressed storefronts showing what proportion of gross revenues there are paid in taxes and regulatory costs. And a nice touch would be a chart tracking that percentage over time.

Oh, and you might add the faces (las facades) of the mayors in office during the property’s decline.

Craig Ladwig is editor of The Indiana Policy Review. Contact the author at cladwig@inpolicy.org.

1
Text Only | Photo Reprints
Columns
  • DAVE BANGERT: Indiana's new chief justice and court's 'mom question' Two years ago, as Loretta Rush ascended from Tippecanoe Superior Court 3 judge to the state’s Supreme Court, I dropped this line in a column celebrating someone who had earned her place.“Across the state, the headline will be: ‘[Mitch] Daniels Choose

    August 14, 2014

  • JEFFREY McCALL: POTUS promises of transparency fail to materialize The United States system of government relies on citizens having full access to information that can be used in self-governance. Journalists and other First Amendment advocates were enthused when the Obama administration came into office with convinc

    August 14, 2014

  • Rob Burgess House of Burgess: RIP Robin Williams

    I was re-watching the 2006 movie “Little Miss Sunshine” Monday when I heard my phone buzz. After the credits had rolled, I looked at the screen and found myself shocked.It was a news alert that Robin Williams had died that morning at the age of 63 of an apparent suicide.

    August 13, 2014 1 Photo

  • ANDREA NEAL: 'Paddle Your Own Canoe' is a Hoosier inspiration

    Editor’s note: This is one in a series of essays leading up to the celebration of the Indiana Bicentennial in December 2016. James Whitcomb Riley was the most acclaimed, but he wasn’t the first Hoosier poet to gain national fame. Sarah T. Bolton dese

    August 13, 2014

  • DAVE BANGERT: Rokita, illegal immigration, Ebola outbreak and context At first listen last Monday, there was something so unsavory about our congressman, Todd Rokita, whipping up two full-fledged crises — Central American children at the U.S. southern border and the African scourge of Ebola — into one pungent sound bit

    August 12, 2014

  • DAN COATS: Let's give nonprofits relief from IRS delays A flurry of scandal has recently surrounded the Internal Revenue Service.Over the past few months, we have learned about missing emails from IRS employees and revelations of clear bias and hostility by a top IRS official towards organizations with ce

    August 12, 2014

  • BRIAN HOWEY: Pitchforks and pikes in our summer of discontent Congress is ... embarrassing. Our political system is failing us. On an individual basis, many of us have respect for members of our delegation. We can have a common sense conversation with a senator, congressman or congresswoman, and then they go ba

    August 11, 2014

  • DICK WOLFSIE: Enough reminders to forget It began with a simple phone call to my friend, Auri, a computer geek I asked to help me with my very successful website, which right now is attracting up to three visitors a month. To have a strong online presence, you have to spend several hours a

    August 11, 2014

  • ED VASICEK: Outsourced jobs, health crises in foreign lands The other week, my Internet was giving me trouble. I called the support number, and — to my surprise — I spoke to a representative who sounded as American as apple pie. It turned out the technical problem was an oversight on my end and fixed quickly.

    August 10, 2014

  • MICHAEL HICKS: Dodging corporate taxes Corporations are among our oldest institutions. Something like a joint stock company probably triggered the earliest formal written communication — the accounting ledger. It should be unsurprising that the early traders of Mesopotamia used a corporat

    August 10, 2014

Latest news
Featured Ads
Only on our website
AP Video
US: We Do Not Pay Ransom to Terrorists Ferguson Teachers Training to Deal With Trauma Jon Hamm on the Unrest in Ferguson Tit for Tat? McDonald's Shuttered in Moscow Life on the Professional Video Game Circuit TX Gov Perry in Washington: 'Confident' in Case Hospital Releases Two Missionaries Who Had Ebola Ramen Health Risks: The Dark Side of the Noodle NYC Doctor-in-chief Seeks Community Approach Indonesian Police Fire Tear Gas at Protesters Raw: Shots Fired in Liberian Shantytown DOJ, Bank of America Reach Record Settlement Raw: Cubavision Airs Images of Fidel Castro Raw: Grief After Deadly Airstrikes in Gaza Officer Who Pointed Gun at Protesters Suspended Kathy Griffin Challenges Minaj to 'a Booty Off' Johnson: Six Arrests, No Tear Gas in Ferguson Raw: Rescue, Relief Efforts at Japan Landslide Cadavers, a Teen, and a Medical School Dream California Drought Stings Honeybees, Beekeepers
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Obituaries
Poll
Kelly Lafferty's video on Tom Miller