State has lofty goals for economic activity in 2012
Posted: 05/25/2012 at 1:15 am
By: Marilyn Odendahl
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Daniel J. Hasler, CEO of the state economic development agency, is optimistic that 250 companies will choose Indiana in 2012 to either expand or relocate their operations. He pointed to the high rankings from CEO magazine and the Tax Foundation along with the infrastructure investments funded by Major Moves and the recently passed Right to Work legislation as indicators of Indiana’s ability to appeal to businesses.
So far this year, the IEDC has completed 96 deals across the state. In Elkhart County since 2011, the economic development organization has been a part of nine expansions, including Lippert Components and Kinro Manufacturing Inc. Supreme Industries Inc. and Spartan Motors, Inc. totaling $31.7 million in new investment and 1,608 new jobs by 2015.
Hasler, who was appointed as the Indiana Secretary of Commerce as well as the CEO of the Indiana Economic Development Corp. in September 2008, has spent a significant portion of his time traveling to other states to court company leaders and get them to look at Indiana. Recent trips have taken him to California and Illinois.
The neighboring state to the west has been an economic target – and punching bag – since January 2011 when the Illinois General Assembly raised corporate taxes from 7.3 percent to 9.5 percent and personal income tax from 3 percent to 5 percent.
This move sparked an immediate reaction from Indiana. Gov. Mitch Daniels said having Illinois as neighbor is like living next door to a dysfunctional family and Mitch Roob, former CEO of the IEDC, described the tax hike as stupid. In addition, the Hoosier state launched an advertising campaign advising businesses if they were “Illinoyed” at paying higher taxes to consider moving to Indiana.
Hasler is striking a more conciliatory tone.
“When we go to California and Illinois, for that matter, we’re not trying to stimulate people to do something new,” He said. “We’re basically trying to raise our hand and say, ‘Look, if you are thinking about an expansion, if you are thinking about leaving the state – and we know many of you are – we would like an opportunity to compete for your business.’ I’m not poaching, I’m not robbing, I’m merely trying to catch them as they fly by.”
Especially in regards to Illinois, Hasler emphasized the need to keep the Midwest strong since it was competing on a global scale and Indiana will do what it can to help its neighbor stop hemorrhaging businesses.
“We want and need a strong Midwest. We need and want a strong Illinois. Chicago is incredibly important to the northern part of Indiana,” he said. “Make no mistake about it, it pains one to see what’s happening there. We don’t have to have someone else lose for Indiana to win.”
Elkhart County got an Illinois company in July 2011 when Special Metals Corp. announced plans to relocate its A-1 Wire division from Rockford, Ill., to its plant in Elkhart. The move was expected to create 100 new jobs by 2014.
Prior to joining the IEDC, Hasler held a number of leadership positions at Eli Lilly and Co. and retired after 31 years. He said he never dreamed he would ever lead a government agency but he has found great enjoyment in courting businesses.
Luring companies to Indiana benefits businesses already here by bringing potential collaborators, suppliers and customers, Hasler said. In addition, these companies can bring new jobs.
“We benefit by having robust employers in the state because we still have, despite the fact that we’ve had some wonderful gains in our employment numbers, we still have a lot of Hoosiers, very capable of working, very talented Hoosiers, that don’t have jobs today,” he said. “And that is front and center, first and foremost, and that’s what gets us up early in the morning.”
However, getting a company to relocate or expand is not cheap. Often the IEDC along with state and county governments offer incentives in the form of tax credits or tax abatements to help offset the cost of moving or growing in Indiana.
The companies that have grown in Elkhart County 2011 received $9.4 million in performance-based tax credits and $732,500 in training grants from the IEDC.
“Again, the reason we want companies to come to Indiana isn’t because we’ve offered them $100 million to move, that’s a shotgun marriage,” he said. “The reason we want people who want to come to Indiana is because they can make more money, be more profitable and have a more robust workforce in Indiana than anywhere else. If some incentives help them cover that cost of the relocation and move, great.”