- Associated Press - Tuesday, December 15, 2015

INDIANAPOLIS (AP) - Gov. Mike Pence says seven Indiana regions are all “winners” because they submitted proposals seeking millions in state redevelopment dollars offered through his signature Regional Cities initiative.

But in reality, only three of those metro regions - Fort Wayne, Evansville and South Bend - will actually get a winning $42 million cut.

Left out of Pence’s final plan, approved Tuesday by the Indiana Economic Development Corp., was money for other parts of the state, including northwest Indiana, the Wabash River region, the Indianapolis area and Muncie.

“These are all winners,” Pence said of applicants who pledged to use the state dollars along with local funding and private investments to build and redevelop amenities such as walking trails, rail lines, theaters and historical buildings. “All these proposals that you can examine online are very impressive and they represent a level of thinking and collaboration and thoroughness that is impressive.”

Pence said his plan aims to make Indiana’s metro areas more desirable places to live by providing a monetary boost to encourage better urban planning. If successful, that could stem the outflow of younger Indiana residents who seek employment elsewhere.



But the effort puts state officials, under Pence’s direction, in the position of picking winners and losers - an idea that runs against the free-market conservative principles Pence says he supports.

“Can government pick winners? Generally not,” said Charles Trzcinka, a free-market scholar and professor at Indiana University’s Kelley School of Business.

Trzcinka said some of the kinds of projects included in the Regional Cities initiative generally have merit. For example, efforts to improve infrastructure and schools are all legitimate uses of public dollars, he said. However, he questioned the use of public money to pay for private projects and noted that even highly successful venture capitalists “fail 90 percent of the time.”

Still, supporters of the effort say something needs to be done to stem the flow of career-minded Indiana residents who leave the state.

“Indiana being a Midwest state doesn’t have the advantage of the coasts or the mountains as a draw for young human capital,” said Larry Gigerich, an economic development adviser who also served on the committee that vetted the applications.

The regional cities plan was a top priority for Pence during the last legislative session, though lawmakers were skeptical and approved $84 million in funding only in the session’s closing days.

Initially, only two regions were supposed to get selected as winners. But on Tuesday, Pence and the IEDC announced that a third had been added - a move that will require Pence to go back to the Legislature for an additional $42 million during the coming session.

Thus far, the response from GOP lawmakers who dominate the Legislature has been mixed.

Senate Appropriations Committee Chairman Luke Kenley, R-Noblesville, said he supported the idea. Meanwhile, House Ways and Means Chairman Tim Brown, R- Crawfordsville, was ambivalent, indicating that his priorities were those laid out by Speaker Brian Bosma, including transportation funding, teacher pay and “curbing illegal drug activity.”

Either way, Trzcinka said Pence’s program amounted to the “government making a bet” that tech-friendly buildings, new paths and redeveloped riverfronts will stem the tide of residents who leave the state.

“Building a bicycle path may help, but it’s probably not going to help that much,” he said.

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