Candidates for governor want to seed job growth locally

Economic development has been a key focus of Republican Gov. Eric Holcomb, under whom the state’s job-creating agency—the Indiana Economic Development Corp.—has grown in size, funding and stature.

Holcomb’s IEDC is developing the LEAP Research and Innovation District in Lebanon, a massive campus for which the state is buying thousands of acres of land for potential economic development projects. At the governor’s request, the Legislature put $500 million into a deal-closing fund to help the IEDC act quickly when trying to attract large companies.

The IEDC is also administering the governor’s Regional Economic Acceleration and Development Initiative, called READI, which has sent or is set to send more than $1.2 billion from the state and Lilly Endowment Inc. into communities for quality-of-place projects.

And Holcomb has made dozens of trade trips in an effort to increase direct foreign investment in Indiana.

But do the candidates seeking to replace Holcomb give the outgoing governor a good grade? And what would they do differently?

IBJ asked Republican U.S. Sen. Mike Braun, who ran Jasper-based Meyer Distributing before he entered politics; Democrat Jennifer McCormick, an educator and former state superintendent of public instruction; and Libertarian Donald Rainwater, a software engineer, how they plan to approach economic development and jobs creation.

Two weeks ago, IBJ published the candidates’ positions on the LEAP district in Lebanon. You can find that story at IBJ.com. Here’s what else Braun, McCormick and Rainwater said about economic development. Their responses have been edited for brevity and clarity.

How would you grade the state’s current economic development efforts? Why?

Braun: I’d give it a B, because getting an A for me is going to be almost everything working on full throttle. But I think that’s a good grade.

Mitch Daniels from [2005] to ’12 set a pretty good template. I think the [Mike] Pence and [Eric] Holcomb administrations have done well. We’re ranked in the top quintile of places where you’d want to have your business. We’ve got other advantages, like the inherent location of being the Crossroads of America. But we do have new challenges going forward.

I want economic development to take into consideration that water and electricity … are issues, but [just about] everybody’s got issues with those two variables. …

I want to make sure we’re spreading economic development out around the state. I hear that often—that we don’t see it being more broadly pursued. I’m going to try to really fertilize the field of small business and entrepreneurs. [That] costs a whole lot less [than attracting other companies]. We have a whole lot more [small businesses], and if we can grow them organically, it costs us a lot less than trying to fish in the biggest of companies.

McCormick: It’s a tricky question. There are things that Indiana is doing very, very well that I would be in support of continuing. Some of the things that are going really, really well: the READI grants, the [Stellar Communities Program] grant, some of those items.

I’ve also heard from local folks—which we feel are incredibly important in this whole partnership—that we [need to] listen to them. They are asking for more flexibility with how some of [the grants] can be defined. They’re also asking that some of the red tape that is causing the process to slow down be eliminated.

Although there are things that are going really well in Indiana with economic development, we still have room to grow. We also know that, although we are attracting jobs, we want to attract high-wage, high-demand jobs. That means we have to have a workforce that is ready, and that is part of our charge as well.

Rainwater: I would probably give the state a C-. I believe that government—local and state—is too heavy-handed in economic development. There is … entirely too much government involvement in choosing winners and losers and in forcing economic development.

I believe that there are a lot of small-business owners and what we would probably consider mid-range business entities that are probably feeling squeezed out because of our current state government’s economic development policies.

Some critics say Indiana has focused more on attracting large multimillion- and multibillion-dollar investments than on providing more support for small businesses. Where do you stand on that?

Braun: My experience before I got into politics was 37 years of both elements. It was a scrappy, trying-to-survive business for half of that period. It grew into a regional and then national company. And we didn’t get really any [government help] other than maybe local tax abatements in Indiana.

You’re not betting on just one entity. You’re betting on the field of entities out there. If you give them good growing conditions, you can maybe have a less costly, more wholesome economic growth.

You’re not going to want to lose out on the few big entities that everybody’s going to be after. … They generally require a lot to lure them here. If they need a whole lot of water and electricity, no state really has that to offer easily. So you’ll make common-sense trade-offs.

I think the more we can emphasize and grow our own [companies] and help our small business and entrepreneurial community, the easier it makes the job of trying to lure in the ones that every state would want.

… I’m going to know what a good return on investment is. Remember, I’ve signed the front side of the paycheck, grown a company aggressively. So, I’m going to know what to look for, and we’ve got limited resources. We want to make sure that we get the best [return on investment].

McCormick: It’s got to be a balance. So much of Indiana is built on the backs of small business, so we have to take care of them. But we also need those huge businesses coming in that pay very, very well and that keep our economic engine going.

We need a balance of that, so it’s not an either/or. We have to be responsible in taking care of both.

Rainwater: I am a believer in an economy that was built on small businesses, family farms and individual entrepreneurship.

Obviously, 150, 200 years ago, there weren’t the big global corporations that there are today. The Indiana economy was built on a much more micro-economic platform. We’ve gotten away from that, especially considering the actions of our state government during the pandemic.

We’ve seen a significant shift away from small businesses here in the state of Indiana. … That is going to be a focus of mine. We need to bring back the small businesses and entrepreneurs in Indiana. And our state government needs to focus on how we grow, reduce regulation, reduce taxation and make Indiana a more small-business-friendly environment.

Where do you stand on local control as it relates to state-catalyzed economic development? What do you believe the state government’s role in economic development to be?

Braun: That balance—I’d have to look carefully to see how much of it there is between those two camps.

Going back, we’ve done a pretty good job at it. I don’t think it’s broken to where you’ve got to completely fix it. It may need to be modified.

I’m a believer that you take all the current information you’ve got, and you try to see further down the road to see how you might tweak or change something. I was able to grow a business aggressively—way beyond the average, because we were always looking for new ways of doing things, new markets.

McCormick: What I have seen that works well during my limited time at the Statehouse was more support and guidance versus that control and command. Making sure that we’re allowing local autonomy and flexibility and decision-making. But I do believe there is a role to be played in making sure that our state government is supporting and guiding the needs of our local communities.

I’ve always been a firm believer in local control. I think we’re better when we have local control, but we can’t pick and choose. (My running mate Terry Goodin and I) live that. Both of us have a background in schools, and we heard and preached local control—until [those preaching that] didn’t like the local leaders or they didn’t like the local decision. It can’t be situational local control. It needs to be local control. And I support that because that’s where the rubber hits the road and good changes happen.

We want to bring good-paying jobs in, but we don’t want to have state government pulling an overreach and controlling that local decision-making on how to best do that.

Rainwater: The role of state government in economic development should be to create a fair and even set of regulations that allow not only existing businesses to thrive but new businesses to break into the market.

I feel like government’s job is to safeguard everyone’s individual rights. As an entrepreneur, I would want my state government to provide safeguards that make sure that already-established large businesses aren’t getting preferential legislation that keeps me out of the marketplace or that a small business has the same opportunity for tax abatements or tax exemptions as a large corporation coming into Indiana for the first time. I think government’s role is to keep an even playing field where all comers can compete in the free market. And when I look at the state of Indiana, I don’t see that today.

Not only in economic development but throughout the state, we want as much local control as possible. The old adage is that all politics are local. Well, all economies are local. It really does come down to what is best for an individual community, and the community should decide that, not a statewide agency.

One of the things that frustrates me is the idea that communities have to compete for state dollars for economic development. I feel like, if the state has so much money that it can do that, then we’ve probably collected too much in taxes. That money should be available to people to invest locally, to grow their economy—not here again have the state decide.

Would you change anything about the Indiana Economic Development Corp.?

Braun: I’ll make it more transparent. I’ll look at who, what’s there and who comprises it currently, whether it looks like everything’s in pretty good shape.

All the agencies … I’m going to go through to make sure they’re serving Hoosiers, that they’re doing a decent job. I’m going to talk to the folks within them and some of the folks that work with the agencies, and that’s going to be relatively easy. Again, because I did that for 37 years, hopefully it’ll be easier for me than many of the governors that don’t have the experience of running a business and signing the front side of a paycheck.

… I won’t comment on [whether I think the IEDC is too big] until I get in there and see what it’s done over time, whether we’re getting the results from it. Just an important thing for our state, the biggest manufacturing state per capita in the country, and we got to make sure that we keep investing in our own economy, keep it a great place by our rules and regulations, for people to come here, families to move back here.

McCormick: There’s not enough oversight. … It seems to be a blank checkbook and whatever [the IEDC wants] to do and however they want to go about it.

There needs to be more oversight. There also needs to be more transparency and accountability. There is a lot of money flowing with very little oversight, and that is not typical. It’s not traditional of Indiana. … We owe it to taxpayers to be accountable for those dollars.

IEDC is doing some things well, but the lack of oversight is huge—very, very concerning.

Rainwater: First of all, I don’t believe that the Indiana Economic Development Corp. should be purchasing land. I don’t think it should be engaging in giving 35- or 50-year sales and use tax exemptions that the individual Hoosier has to make up the difference for.

I think there needs to be a balance, and right now, I don’t think there is a balance. I think everything is very, very tilted toward these huge deals with these huge corporations.

I really don’t see anywhere in our state constitution where it says that the governor or the executive branch of government, in general, should be engaging in this type of economic development. I would really look to reduce the involvement of the Indiana Economic Development Corp. in a lot of these big deals.

I think that economic development needs to be focused more on Hoosier [residents] and … small-business owners, entrepreneurs, franchisees. The people who are here need to get more attention than global corporations.

Workforce development is a major consideration for businesses and Hoosiers in general. What is your vision for Indiana’s future workforce, and how do you get there?

Braun: We balance it out, and we guide correctly through middle school and high school, and we make sure we’re honest about what the high-demand, high-wage jobs are—many of which need a better high school education and career and technical education. We get full transparency, engage students and parents and make sure that we’re not promoting something that would have the unintended effect of shoving our kids out of the state to build a family or a business or pursue a career. [Those are] the general principles that I’m going to want to put into the [Department of Workforce Development].

I think we were there, close to it, several years ago. [But] I don’t think we fully took the bull by the horns.

We’ve got at least 130,000 to 150,000 jobs that need no more than better career and technical education and middle school and high school adjustments that will cost nothing in terms of [requiring] post-secondary education. That would add $2 billion to $3 billion to our state income and fill jobs that have been begging for a long time.

And then make sure when it comes to postsecondary [education], that we’re creating the degrees that our businesses need in this state. … Remember, we’re exporting our own kids to find jobs outside the state.

… I want to make sure parents and students have full transparency on what the high-demand, high-wage jobs are, whether you need any further education or obviously on some pursuits you’re going to need post-secondary. I want it all matched up with starting pay, career pay, cost of education, no cost of education. And make sure guidance counselors are being reasonable in terms of what they’re doing, guiding kids and parents on what the successful outcomes will be.

McCormick: What I will tell you is, for sure, that Indiana benefits when we keep our rigorous academic standards and our expectations so that we can have that high-wage, high-demand job filled. … To me, it goes right back to making sure we’re being smart with prioritizing education.

The other piece of that economic development is child care. Over half of our counties still don’t have access to affordable and quality child care. Indiana has made strides, so let’s give credit where credit is due. But we have a long way to go.

I know school systems are trying to play a part of that. I know our private partners are trying to play a part of that. But the child care piece is one that we can’t expect people to get to work if they have nowhere to send their kids in a safe environment. … It’s proven in other states. In Indiana, we’ve got to see it as an investment versus an expenditure.

Rainwater: That, to a great extent, needs to be an organic endeavor. We need to allow Hoosiers, first of all, to have better educational choice. I advocate for real universal school choice. I believe that we need to encourage educational excellence and innovation, again, instead of trying to control and manage every educational opportunity through government-mandated schooling.

I believe that if we can create an environment where people know that if they come here, not only do they have the opportunity to get a good education for their children or for themselves, but they have the opportunity to … get a good job, be an entrepreneur and to start up their own business—and to have the opportunity to make those choices on their own.

We’ve really gotten to the place in our society where we look to government and go, “Well how are you going to fix this problem?” Many times, government created the problem, and the way that we fix it is to try to bring government back a little bit and let the free market, let the individual [person] have opportunity, have choice and be able to decide for themselves how they want to finance their life.

If they want to do that through being an entrepreneur or by working for a small business or working for a corporation, I think those are choices we want people to have in Indiana.•