Tiered funding best for regional initiative

The idea of the Regional Cities Initiative — intended to grow the state’s economy — sounds simple and has merit: Encourage cities and counties to work together in an effort to recruit new companies, attract talent to the state and create more jobs.

Rather than each community competing against others, collaboration is considered the key to building cities and regions into national brands. This type of group effort was designed to help overcome one of the primary obstacles of economic growth: a stagnant population.

Gov. Mike Pence signed the initiative into law March 24. Now he is seeking $84 million over a two-year period for the initiative, and House Bill 1403 creates the regional Cities Fund, which would allow the state to be a financial partner in regional economic plans by providing grants or loans.

It’s a proposal worth tracking as the legislative process unfolds in the Indiana General Assembly.

But keeping tabs on the details, such as funding, will be important because they are the key to determining the viability of the initiative, and whether it could benefit smaller geographic areas.

Foremost are questions about how to fund the state’s portion and the degree of matching funds that would be needed from city and regional partners in order to leverage state funds.

Where the state funding will come from is uncertain, especially at a time when this funding request is competing with those for education and road programs.

If the local match amount is so large as to be prohibitive — even with the collaboration of several smaller regional cities or counties — then one would have to question how beneficial this program truly would be for the state. In that situation, only larger metro areas in the state would seem to be able to reap economic rewards.

Columbus Area Economic Development Board President Jason Hester was right to raise concerns about whether smaller communities will be able to play in this “game.” Based on presentations he heard, the local match could be hundreds of millions of dollars.

If that’s the case, then we urge lawmakers to consider Hester’s suggestion of a tiered approach to funding regional proposals based on the size of the communities. A greater amount of funds would be set aside for the larger communities, a smaller amount for medium-size communities and an even smaller amount for the smallest communities. Local matches would be tiered, too.

That would be a way for communities to collaborate and leverage state funds to stimulate economic growth, but at a price they can afford.

A “game” in which the cost for many communities is too prohibitive to enter would defeat the purpose of the initiative.

At issue

Encouraging cities and counties to work together in economic development has merit.

Our point

A tiered approach to funding regional proposals based on the size of the communities would avoid making the effort too expensive to undertake.