In the 1980s and 90s and well into this century, Indiana tended to view economic development as the enticement of high profile, high tech, high wage manufacturers, ideally from other states, if not other countries.

More recently, many Hoosiers, including a fair number of policymakers, have called for greater transparency in such matters and for a shift in emphasis, namely to the cultivation of smaller, more prosaic employers already establish in Indiana.

Hi, I'm Jon Schwantes, and on this week's show, we'll look at efforts unfolding this session to recalibrate the state's economic development strategy.

Indiana lawmakers from the state House to your House.

Indiana Lawmakers is produced by WFYI in association with Indiana Public Broadcasting Stations.

Additional support is provided by the Indy Chamber, working to unite business and community to maintain a strong economy and quality of life.

Here is Indiana's economic development, by the numbers.

Over 80% of Indiana's land is dedicated to farms and forests, and agriculture plays a substantial role in the state's productivity.

Indiana is the fourth largest producer of corn and the fifth largest producer of soybeans.

These two cash crops account for nearly 60% of all agricultural output in the state, and Indiana also contributes to the nation's pork, poultry, eggs, and dairy products.

Manufacturing continues to dominate Indiana's economy, though the state ranks second in overall automobile production, with 1 in 5 Hoosiers employed in advanced manufacturing.

Indiana boasts over 9000 manufacturing operations across the state, leading to high employment numbers and high quality jobs.

Innovations in semiconductors, AI, and other technologies attract new businesses, particularly in advanced manufacturing.

Technology companies including Amazon, Google and Microsoft have committed to a $15 billion investment to create and maintain data centers.

This would boost economic growth and output, but the construction of data centers would have a major impact on the environment and the production of energy requires significant costs to maintain.

Indiana's unemployment rate mirrors that of the national average, coming in at 4.1%.

The unemployment rate, both in the state and across the country, is considered to be a strong indicator of a healthy economy.

Experts estimate that unemployment in Indiana will continue to be lower than the national average, a byproduct of a skilled workforce.

Diversified economic opportunities and policies incentivizing participation.

And I am pleased to welcome Republican Representative Jake Teshka of North Liberty, Democratic Senator J.D Ford of Indianapolis.

Republican Representative Danny Lopez of Carmel, and Democratic Representative Matt Pierce of Bloomington.

Thank you all for being here.

The first week of the session, the Indiana Economic Development Corporation just, I'm sure, by coincidence, put out a study recounting its successes over the previous eight years So let me ask you now, we got all this legislation to change course.

What happened to if it ain't broke, don't fix it.

Let me start with you, Jake.

Well, thanks for the question.

And, certainly want to recognize, the growth, in the state and the good work that's been done and all the capital expenditure, that, that we've attracted.

I think there's a lot that goes into that.

What we've recognized and what I've recognized over the last several years that I've been in the legislature is that that while we continuously rank as one of the top states to start a business, I think number two, you know, in Forbes or CNBC, we consistently lag in actual new business starts.

And so I started, several sessions ago to try and dig in and find out why is that, and is there a way that we can move the needle.

And so for the last several sessions I've, I've worked on, different policies like a regulatory sandbox to help our startups, a right to start act.

we combine those one year.

And so we've, we've really tried to hone in on, on this entrepreneurship startup kind of thing.

What we know is that, most net new jobs in this country come from those firms that are five years, or younger, right?

That, our larger firms tend to add and shed jobs at roughly the same rate.

And so, you know, my, my passion here is, is really to try and encourage entrepreneurship.

that's why I offered, House Bill 1172 this year to, create the Office of Entrepreneurship, which aligns with one of the governor's priorities, in terms of his new vertical.

and really, that's, that's not to take anything away from ITC or anything like that, but really just to refocus and make sure that we are, spending adequate time and energy on our entrepreneurs and small businesses in the state to grow them, from the ground up.

You know, JD Ford, I get the impression when you look at the past eight years, it's almost as if looking at the US economy in 2020 for some people said the market is booming.

You know, profits are up, some people are going gangbusters.

And yet people were hurting, obviously, and we saw the results in November.

Is this sort of a similar situation in that it's not a statewide issue?

There are pockets where people where it's booming.

there are certain places and in Indiana that is getting the, you know, extra dollars, right?

you mentioned earlier in the opening, if it's not broke, don't fix it.

I think all you have to do is just travel up 65 and ask any of the farmers in Boone County.

They would tell you that it's definitely broke.

they I feel like, you know, even I don't represent them, but they were even contacting me to say, we need help.

and we just don't feel like anyone's listening to us.

and I think, you know, that was part of the problem with ADC is that they were always constantly coming back to the legislature asking for additional dollars, but really, there were no guardrails or, you know, expectations, for the money.

and we should know what the ROI of that is going to be.

So, so I think you have upwards.

Of $1 billion, I guess just in the past, couple budgets.

And even for the small businesses, it's great that we're dumping all this money and welcoming, you know, these large businesses like meta and Facebook, but small businesses in my area are saying, what about us?

What about our cut of this pie?

What about the leap district?

Again, that's, not your district, but your neighbors.

Yeah.

I mean, this was a huge project.

Was it 900 acres?

The idea was to make sure it's shovel ready.

It's nimble, it can move.

so far, Lily's there and some other, But there's still plenty of room of those 900 acres.

I mean, and that's it.

Was that what really got.

I mean, a lot of this, I thought.

I think ultimately this will be one of the most consequential projects long term, that the state has seen from an economic development standpoint.

I think it certainly has brought to light some issues of transparency and other things that we've tried to address in the legislature this year.

You know, which isn't surprising.

We created IDC 20 years ago, and this has been a continual sort of, issue that has festered from time to time.

And it is true that there has to be greater transparency and beyond transparency, a better communication between the state, the IDC, or economic development apparatus and locals.

I think that's incredibly important.

But I will say, and I continue to sort of harp on this, both on the floor and in the caucuses.

We've got to make sure that we're not throwing the baby out with the bathwater.

The reality is that we've diversified our economy over the last 20 years.

And of course, we can talk about the last eight.

But truly, it's been 20 years of putting things in place to make us competitive with Ohio and Georgia and Florida and every other state to Tennessee, every other state in the country, which we weren't competing with before.

and I mean, you pointed to the to the, to the study or the report that IDC put out.

We had three consecutive years of CapEx investment records.

But beyond that, I mean, just last month we had bio life, bio crossroads put out.

You know, we are now the number one state for life sciences products exporting, which used to be California.

It was the gold standard.

it's $100 billion industry in our state.

It's statewide.

And it isn't just Lily.

Lily obviously is a big piece of this, but it's me, Jonson, and it's Roche Diagnostic Diagnostics, and it's, Cook Medical.

So we've got a an ecosystem that we've created, over time.

And I think that's something that we need to number number one to be proud of, continue to sell.

certainly strengthen, certainly continue to work on, which is what I think you've seen.

I think the aiming at smaller businesses and, you know, the supply chain is important.

but again, we shouldn't be throwing the baby out with the bathwater because it truly has been a transition to.

Keep doing that.

But do these other sorts of things too.

Matt Pierce, now, you represent, that little institution called Indiana University, the Bloomington campus, Do you feel that, Bloomington, in your area, has benefited from the past eight years of or.

Let's go back to the 20 years that IDC has been in place.

You know, it was it was created in 2005.

So almost 20 years, or are you on the outside looking in?

Well, I think the biggest problem is that the General Assembly created, black box of IDC.

It's hard to know really what's going on inside IDC.

And what we saw is they got out in front of their skis on this leap district, and there's really not any oversight.

I mean, it's interesting how the IDC suddenly became land developers, right?

And no one ever came to the legislature and said, we would like you to pass legislation to authorize us to be land developers.

And yet they went ahead and did it.

And so the House Democrats have been, attempting to get some significant oversight of IDC to actually understand what they're doing and make sure that, you know, legislatures providing some guidance on what they do, and so far have not been able we have not been able to get our Republican colleagues to to join us in that, but we're going to keep pushing for it.

Well, there was no legislation saying they should get in the land, speculation or land development business, but lawmakers, I don't know how you voted on that particular budget, but did in the most recent budget cycle, I think, was a half $1 billion to be ready to develop and to acquire land at a moment's notice.

Was that a mistake in hindsight?

Look, I don't I don't know that that was a mistake.

I think, represent Lopez hit on some of these things where.

Yeah, these are minor tweaks to ensure that the communications.

Right, that the transparency is right.

you know, in my district, we've got an $11 billion Amazon, data center going up, right next door is a $3.5 billion, GM plant that's, under construction.

and the folks in my district, had some concerns initially.

Right.

I think that a lot of folks have come on board since then.

but I think it was less about the projects themselves and more about the communication or lack thereof, and the feeling that this was being done without their input.

And so I think we've learned some things through that.

Right.

And I think that, we're trying to address that.

And I know that, you know, Secretary Adams and others are working hard at that as well.

And so I'm actually confident that that in the future, we can get better at this and we can continue to to move the needle, make sure that Indiana remains a state that, companies, a large and small want to want to move to, and that entrepreneurs can be successful as well.

Well, let's let's talk about a few of the specific bills.

some of the things a lot of bills, I think more than a dozen were introduced, this session.

And a lot of them, didn't get a hearing, not surprisingly, and those things tended to be, dramatic leadership changes in the IDC or dramatic funding changes, not just reduction, but changing the the pipeline of, of funding, and these types of things or putting lawmakers as non-voting members, etc., etc.

other bills seem to be earning a fair amount of support.

And three of you, are on one bill.

JD for talk about that one, what you hope to accomplish there.

Yeah.

So actually it should be okay.

I'd like to represent it.

Touch can talk about the data centers.

And I actually had a bill some 135 did not get a hearing.

but a lot of the concerns that I'm hearing all across the state, particularly there's a data center going into Franklin Township right now.

There's a lot of folks that are finding my bill and saying, well, why, why, why can't this be in policy now?

And essentially what that bill would say is that if you want to put a data center, in the permitting process, the company who is trying to develop it should, you know, disclose how much, water they're going to use, how much electricity they're going to use.

and then once it's operational, then continue to report exactly how much electricity and how much water they are using.

you know, right now, it's it's concerning to me because, you know, President Trump, was at Mar-A-Lago and announced that, you know, he's securing extra funding from an Emirati billionaire to basically dump all this money into these data centers all across the United States.

Indiana's on that list.

And so I think we're going to see a huge influx of these data centers.

And if that's the case, there should be some transparency on the front end.

And we should be, you know, collecting this data and looking at it to make sure that we're making good decisions.

I think that's really what people are looking for in this.

And you talk about the utility usage and disclosure up front.

And I guess not to dwell on the leap, district, but one more for those who haven't followed it.

One of the beefs about that, in addition to the lack of transparency, was the use of water, the notion that there wouldn't be enough water there.

And so the notion of pulling it from Tippecanoe County or different water basin, and that is, I guess, what the notion is very sensitive and.

Yeah, and say an IDC, you know, went out and, you know, found a company that would write a very favorable report saying, oh, yeah, it's okay to take 100 million gallons of water from the Wabash.

you know, and so I think people looked at that report with a little bit of a skeptical eye, about that.

You mentioned data centers, and that seems to be a big push nationally.

Now, some organizations, called for a moratorium on these because of the energy consumption.

Until we get that part of the equation, because I'm always intrigued when we talk about economic development.

Some people say it's about low taxes, you know, business taxes.

Some people say it's about quality of life.

Some people say it's about infrastructure and energy.

I mean, what is it?

Okay, I was good at you anticipated my question.

Is it all of those things that can't be one more than the other?

It's not.

It's simply not incentives.

It isn't just incentives.

That's true that much we know.

It is certainly quality of place.

It's investment in many that are made at the local level that entice, you know, companies to, to move there so that they can knowing they can attract employees.

you know, it's obviously our tax structure.

It's other things that we put in place.

I think it's it's our workforce.

It's things that we've done, to make ourselves competitive, for sure.

It's not a one size fits all.

I think this, you know, I'm listening to this conversation.

I think this all really comes down to to balance and figuring out how you properly balance.

number one, the mix of economic development that you're, that you're having, that you're attracting to the state or that you're growing here, not every region is the same.

Not every region is going to have the same economic strategy.

so that's certainly true.

And then I think it's a proper balance between, oversight, appropriate oversight and appropriate transparency and ensuring that your economic development leadership is nimble enough, can be nimble enough to go be competitive.

Let's not kid ourselves.

I mean, when it when it comes to things like foreign direct investment or cap CapEx investment, or job relocation, business relocation, we are in competition.

We are in competition.

CEOs don't negotiate in public, and we are in competition against our peer states.

And so our teams at the state level have to be nimble enough and flexible enough with proper oversight to be able to go out and compete.

And that's.

I'm reminded, I'm old enough to remember back in 2005, when it was fairly controversial, and there was the move toward IDC, which took the place of what some said was a rather stodgy Department of Commerce, which did have transparency and did operate as a traditional state agency.

Is there a concern with all these, reforms in terms of transparency, in terms of notification, say, if you're going to buy now, if IDC is going to acquire 100 acres all at once or in parcels there half, there has to be notification of locals and of the Budget Committee 30 days in advance.

Are you worried at all that, gee, there was a reason they shifted to this plan nearly 20 years ago.

Are we kind of screwing it by going the other direction now, and will we lose our competitiveness?

well, I mean, I it's it's the people's money, right?

It's tax dollars that hard earned people paid into the state.

And I think that they have a right to kind of know what's happening with that.

Even if it even if we don't outmaneuver California or Illinois.

I mean, interesting to me, it's the question I've always asked myself going back 30 years ago when I served in the Bloomington City Council and you'd vote on tax abatements this subsidy that we're providing to this corporation that's coming in.

Is this a subsidy that's making a project possible that otherwise wouldn't happen?

Or we just sweetening the bottom line of the corporation with tax dollars?

And I think that's a question that it's difficult to judge when you have the ITC kind of working within that area.

And so we have big discussions about how many jobs and what's the wage for the job.

At the end of the day, you just wonder whether these corporations just don't know they can play states off of each other and they can just basically garner a subsidy when they were going to do the project anyway, and they knew where they were going to do it.

So the question is, are we getting played by people or are we are we actually, you know, helping companies come here that otherwise wouldn't and that that's the question you have to figure.

That sort of you never know.

And sometimes the jobs don't materialize.

And then you go through the clawback provisions to try to get.

And I don't know that that's an illegitimate concern.

Right.

So the what the notion that these things might not materialize.

Well, promised.

In the idea that, you know, that corporations are now used to the idea of state shopping and ensuring that they're getting the best deal.

Look, I was on city council as well in South Bend, and I often ask myself the same question.

Right.

That's the but for test.

But for this, would this company, move here or remain here kind of deal?

the reality, however, though, as Robert Lopez, pointed out, we are in direct competition with many states, Tennessee, as you mentioned, Ohio, others.

and and so when we're, when we're out there looking for, for these deals, we have to be realistic about what's going on unless we're somehow going to enter into some multi-state compact with those that we compete with most to say.

All right.

You know, no more.

And we're just going to compete on overall tax, climate and workforce and all those sorts of things.

You know, it's kind of hard to get away from, I think some of the incentive thing.

And so something tells me that Indiana Illinois cooperative pact is not going to go over.

That's right.

But, maybe I'm wrong.

That if I were king for the day, I would have a U.S. constitutional amendment that that forbid the subsidies.

Right?

Because it's kind of like, you know, in the world of college sports now, and I owe money.

So you got to play whether you like it or not.

Right.

And and I think that if you had a way to have other states, if all states had a compact, say, we're just not going to spend our dollars in these kinds of subsidies, we'll just compete on our infrastructure and.

Will come down to workforce and.

And those kinds of, I think would be all better off.

But you can't kind of unilaterally disarm, you know, you kind of have to play in that world, whether you like it or not.

Are you are you or anyone worried that as we compete with other states and we try to attract out of, you know, non-domestic companies and maybe other states, maybe everybody's sort of in the same boat.

So maybe it's not that much of a competitive disadvantage.

should we be worried about those kinds of things as we compete vis-a-vis other states?

Yeah.

I mean, you know, the, the letter from the Congress, to the president, you know, was was very concerning.

this was about foreign.

The foreign students, you know, and, and I don't know, you know, why the representative sent that letter?

but, you know, we should be welcoming those those students here, especially if they're here to, you know, provide a resource to the United States in regards to research and and other things of that nature.

so, yeah, we definitely should be concerned.

I think.

Yeah.

I mean, I just said, look, we've I feel like I've got a little bit of a unique perspective, obviously, having been on both sides of of this on the executive and legislative.

And state and federal, and you got a lot of different facets of that.

Yeah.

you know, I've been hearing this argument about how, you know, the progressive folks won't come and, you know, and for sure, I agree 100%.

We've got to be it is a piece of the economic development strategy.

We do have to be a welcoming place and a place that, that that wants, actively wants to attract people, talent, and keep talent here.

that we're growing.

I will say that, you know, the numbers speak for themselves.

New York Times had the rankings of net immigration last month, and we're number seven in the country.

We're the only state in the Midwest that continues to grow.

And this isn't a new phenomenon.

This has been going on for several years.

while other states are in our region are losing, so people are voting with their feet.

They're coming to places, largely in our district, you know, in Hamilton County or districts, but really across the state and red.

Herring, really people.

Are.

And I would I would just say that, that it's it's certainly a factor.

But more importantly is are we building an ecosystem here where people, companies want to be?

And the other thing I'd say in this whole conversation, we're we're talking a lot about these incentives and other things because they come up in these bills and we're having the conversation during.

Session, but they get all the attention they had.

But it's just a piece.

Of what the ITC does or the economic development apparatus does.

we're growing homegrown companies.

We're attracting and retaining talent.

we're doing things like, you know, investing in a, in a, in a tourism and sports, a bid fund, to, to continue to grow.

We've got the best facilities in the country.

But I did.

Want to bring that up because we're talking about agriculture.

That's been a governor's push.

And that's it's clearly the supermajority to push in both chambers.

we talk about bioscience as the other things let you bring up a good topic, sports.

There's a bill that would require IDC to study, how to get a better foothold in terms of e-sports in our state.

Another one was dealing with how we can be a more of a Mecca for professional wrestling.

I don't think that one necessarily is going to get a hearing.

I should check before I, declare it dead, but, and then there, of course, is the new Northwest Indiana Pro Sports Commission, which I think you were alluding to.

you work for the Pacers and and your, I mean, how important is sports in this whole mix?

I mean, people love to criticize because million dollar athletes get all this.

I mean.

I think sports is I mean, I think especially for, for the city of Indianapolis and the ripple effect that, that has, if you just look at the the events that we've hosted, recently.

Right.

And, I brought my son down for the Tennessee Houston game.

Right.

of course, during Covid, we hosted the whole tournament.

we've hosted NBA All-Star, all of these.

You don't begrudge I you I mean, Indianapolis because some people from upstate and downstate, that's been an issue.

Yeah.

No, no, I don't.

Micromanaging of Indianapolis.

Well, that's a that's next week.

Well, well, I, I think it's important I, I think it's an important aspect of of who we are.

And I think, Indianapolis does a great job, in hosting conventions, hosting events.

We're at, what, number two in the country on that, on that, on that point, and so I think that's good for the whole state.

I don't think that's just necessarily something that's good for Indianapolis.

I think, as I said, there are ripple effects to that.

And and when you look out even, broader I mean, you've got this now youth sports atmosphere right throughout the whole state where it's Grand Park up.

I mean, now we've got a, a great, facility in Mishawaka.

And I know there's other places in the states that are state that are trying to attract those youth sports as well.

As the sports and tourism bid fund is a good example of, really a statewide impact.

30% of those dollars are mandated to go outside of Marion County.

And you mentioned sort of tongue in cheek, the wrestling aspect, because of having to sit on the executive committee.

That I should.

Know.

But, but with the Sports and Tourism Bid Fund, we were able to leverage that.

Our team at Sports Corp was able, which is Indiana Sports Corp, not Indianapolis, was able to leverage that into a ten year deal with Indiana Pacers.

So so WWE is a is a massive entertainment company and a ten year commitment.

With WrestleMania coming, the economic impact of that is massive, and that's a great example of how this isn't just about, incentives to have companies relocate from one state to another.

It's also what kinds of investments are we making here?

I think we probably under actually, if you look at it, we've under, invested in tourism because at any time you can get people to come in and spend some time, leave a lot of money behind and then leave.

That's kind of a win win.

You know, they they come and they put money here.

And so that's why these tournaments and things are important because you're bringing people in and they're spending a lot of money here.

And and then they go off and they don't burden your infrastructure for long term.

So those are good things.

And and I think that we could probably do actually a little bit better job of promoting, tourism, you know, beyond the sports realm, although I think another intangible too, is, you know, when we host, a major event like a Super Bowl or playoff games or something, you know, people all across the country, they see Indianapolis, they hear about Indianapolis.

And I think it, you know, we're a flyover country to a lot of people.

So I think that any time we can get people focused on Indiana as something more than just the Indy 500, we're probably doing well.

Well, I know you've promised a guaranteed, I think essentially a return to the Final Four, next year for IU.

So, I hope you can deliver on your campaign promises.

Promises.

Are we quickly.

Because I do want to wrap up talking about tariffs, but is there we've talked sports.

We've talked agriculture.

We talked about are we covering all the bases for it, or is there something where that we're missing.

Yeah.

And I think, you know, obviously people come, you know, to Indiana for all the things that mentioned on the panel today.

But, you know, we also have to create opportunities after work.

So that, you know, the 5 to 9, as they say, you know, and, so I want us to continue to keep that in the forefront.

You know, we don't have an ocean, we don't have mountains.

So we have to keep our, you know, our citizens, busy.

So, you know, parks and and funding for trails and things of that nature I think is, is huge.

And also, a lot of people come to our districts because we have good public schools, you know, and so making sure that that they're fully funded, I think is going to be a thing of the top of my mind as we approach the budget.

All right.

Before we go, can I ask you about the tariffs?

I mean, everybody's an expert who's nobody has a crystal ball, but all you guys are best experts we got here in the studio.

Is this a is this going to help Indiana hurt Indiana?

How worried are.

You?

Look, I think, you know, we're we're getting to that point where we're going to we're going to find out, you know, as you said, I don't even know that anybody here is an expert and certainly not an expert on, you know, what the administration might do, might not do, and how these things might impact us.

But I think it's certainly, you know, it's something that has caused some uncertainty.

I think some uncertainty in the budget, some uncertainty and, you know, out in the, on the marketplace, now, whether or not that's the right, policy and if that's a short term hiccup that, that we're going to get over and at the end of this, will we'll be grateful that, that we had that kind of bargaining chip, that's, that's to be seen.

And so, so I'll, I'll reserve my judgment on that.

I'm guessing there might be a contrary opinion.

I know some of the automakers are retooling so that, say, Toyota can make vehicles or, Greensburg with, Honda here as opposed to Mexico and other places, perhaps.

Is that well, what's supposed to happen happening?

I think it's a pretty chaotic, situation.

And I think it's difficult for the economists to figure out exactly what the strategy really is, because it's just all over the place.

And we got attacking our neighbors, and we're tying tariffs to things like fentanyl coming in that that are not really related to economic development or creating jobs here.

And I think as long as you have this constant uncertainty day after day, I mean, I hear from business people, the one thing they hate more than anything is uncertainty.

They want to know, you know, I hear so often we talk about regulation, this thing.

Just tell me what the rules are and be consistent with them and we will adjust.

Don't be making everything willy nilly and and jumbling everything around.

And I think that's where we are right now.

Final seconds I want you guys need to weigh in.

Good thing or bad thing.

Net for we'll see.

We'll see.

But certainly it's hard to argue with some of what Matt said.

I agree.

Civility is certainly all.

Right.

Double edged sword.

I hope that the sword leans on the side of benefits, to our state.

And I guess we will know.

Well, when, the next quarterly reports from some of the publicly traded companies come out or we see some of the economic data, we'll have a better sense.

all right, don't forget that Final four, commitment you make.

Gentlemen, thank you very much for sharing your your knowledge, your passion on this.

important issue that really is the future of Indiana.

I thank you all again.

My guests have been Republican Representative Jake Teshka of North Liberty, Democratic Senator JD Ford of Indianapolis, Republican Representative Danny Lopez of Carmel, and Democratic Representative Matt Pierce of Bloomington.

We all know what rolls down hill, right?

No not that.

I'm talking about the responsibility to deliver critical services despite major funding cuts, and that has local public officials bracing for impact on the next Indiana lawmakers.

Indiana Lawmakers is produced by WFYI in association with Indiana Public Broadcasting Stations.

Additional support is provided by the Indy Chamber, working to unite business and community to maintain a strong economy and quality of life.