Ballard Administration Now Claims City May Have Lost Rolls-Royce If It Wasn't Offered Tax Breaks For Not Creating Jobs

It's no longer necessary for a company to promise to bring new jobs to the local economy in order to win tax breaks ordinary citizens and small businesses are never eligible to receive. Simply conjure up a hint there is some possibility a company might take its business elsewhere and the public's purse strings open up as far as needed. Feeling the heat of awarding a multi-million dollar tax abatement to Rolls-Royce for creating zero new jobs, the Ballard administration is now claiming the company may have moved its nearly 4,000 jobs elsewhere if the tax breaks had not been offered. The administration is saying that awarding tax breaks so the company would move jobs at its location on Tibbs Avenue to downtown made possible $190 million in upgrades that would have otherwise not been made. The IBJ's Fransesca Jarosz feeds us this latest lie from the Ballard administration:

Without Rolls-Royce being able to make the improvements necessary at Tibbs so they could remain competitive, their long-term viability at that location would be in question, and those jobs would be at risk," said Deron Kintner, executive director of the Indianapolis Bond Bank, the city's debt-financing arm."

"If the site wasn't viable long term, logic would seem to dictate that those jobs would not have remainded in Indianapolis."

Of course, Rolls-Royce, a British-owned company that is relying on federal defense contracts to fund those 4,000 jobs, made no public comment ever suggesting it might move the jobs elsewhere. The company will get not only a tax abatement on the Faris building, which was formerly occupied by Eli Lilly before it started slashing thousands of jobs locally after it was awarded hundreds of millions of dollars in tax abatements by the Peterson administration more than a decade ago, but an even larger $21 million tax abatement for its Tibbs Avenue facilities according to Jarosz. "It's unclear when the company will begin upgrading the Tibbs Avenue plants, but the company expects to complete the work by 2021," she reports. Huh? They get an abatement with a promise to make an investment at some point during the next 10 years?

An ever stranger but not surprising explanation is offered by the mayor's economic development guru. "There's a multiplier effect when you get more high-wage employees in the downtown area," said Michael Huber, the city's deputy mayor for economic development." "They're spending money [and] going out to eat downtown. We believe it also will increase the demand for housing downtown." Somebody is going to have to explain to me how there is more economic development multiplier effect if the same jobs are performed at a downtown location than a location on Tibbs Avenue. It sounds to me like someone is now trying to pick and choose which businesses in which parts of the city get the economic benefits of the jobs already located here. It's really all about pay to play politics, a term that seems almost foreign to the news media in this town.

City-County Councilors Brian Mahern and Angela Mansfield are questioning the deal given that no job creation promises are being made by Rolls-Royce to win the incentives. "Our standard practice has been to require a commitment of jobs," said Brian Mahern. "If they're unprepared to make a commitment, then we're giving them a blank check to spend how they would see fit." "Angela Mansfield said "she doubted Rolls-Royce would move its Indianapolis jobs elsewhere because doing so would be expensive." Community activist Pat Andrews, who normally sides with taxpayers in these debates, apparently thinks giving the abatement without job commitment promises is a good idea. "The size of the investment suggests that Rolls-Royce would be around for awhile after the investment was completed," said Andrews. Well, we'll have to wait about 10 years just to find out if the investment is even made.

The story makes no mention of the fact that one of Rolls-Royce's major contracts with the Defense Department that uses its local labor force is in jeopardy. As the IBJ reported on a week ago, the Defense Department directed Rolls-Royce and GE to halt work on an engine for the F-35 Joint Strike Fighter that is being manufactured locally in Indianapolis and elsewhere around the state, potentially affecting about 2,500 jobs between the two companies, which could increase to 4,300. "The Pentagon in a statement said the stop-work order applied immediately for 90-days, halting the expenditure of $1 million a day for an engine the military has said consistently since fiscal 2007 it does not want," the IBJ reported. "The order doesn’t terminate the program, however, the Pentagon said."

When Ballard ran for mayor four years ago, he complained about the city offering too much in the way of tax abatements and the tax-shifting consequences to ordinary taxpayers. Ballard promised to revamp the City's policies for awarding tax breaks. Instead, he has awarded them just as liberally as his predecessor. As he would now say, "It's the paradigm we inherited."