Saturday, December 31, 2005

BUILDING FOUNDATIONS FOR ECONOMIC DEVELOPMENT IN INDIANA

Hoosiers love to discuss the problems with the Indiana economy. Our Governor often points out that, “Hoosiers earn less than 90 cents for every dollar the average American earns. These losses result in diminished hope and opportunity for Hoosiers around the state and sagging revenue for state government.”

<>So what do we do about it? Can state and local government really play a role in improving the economic well-being of our citizens? Is trying to recruit companies to move here from another state to “bring jobs to Indiana” the only trick in the economic development grab bag? In order to have better jobs and higher income in Indiana, do we essentially have to take those from someone else? Or, can we find a way to produce more jobs and wealth through public policies that make better use of the resources we already have? <>

The answer is, “Yes!” There is a formula for growing jobs at home. 85 percent of the new jobs created in Indiana come from companies that are already here or are being started here. We can do it with the people and tools available to us, and here is how. <>

The solution to increasing wealth and a better standard of living is called “productivity”. Improved productivity increases wealth for individuals and for the economy as a whole. It means getting more done in less time. It doesn’t mean necessarily working harder or working longer hours. It does mean working smarter. <>

Now, working smarter comes in two broad categories. First, we must all be smarter workers. Whether we are working in a factory, providing a service, growing food, or engaged in any other economic activity, modern competition dictates that the workers who make the best decisions, get the most done with the resources they have, and maintain the best quality, will be the economic winners. <>

The second category of improved productivity comes from the use of the best possible tools. Even when we have to invest a little more to get good tools, the increase in productivity more than offsets the cost. <>

If those two principles are true, then government can help to enhance the private sector by encouraging both a better educated workforce and investments in the “tools” that make Indiana the place where the job (any job) can best get done. <>

Now these aren’t new concepts. As long as Indiana has been a state, education has been a recognized priority. Our ancestors also recognized that public utilities like water and highways were the keys to helping all Hoosiers live easier and more productive lives. <>

We are facing many modern challenges and changes, though. Ending your formal education after 12 or even 16 years is no longer sufficient to keep you productive enough to stay ahead of the competition. Hoosiers and their government need to accept, as a part of the cost of the lifestyle they seek, that they will have to continue to educate themselves throughout their working lives. Sweating over the horse drawn plow or the wood fired oven was the cost of a daily living for our ancestors. Today, the muscles of labor that provide our living are less in our arms and our backs, and more between our ears. <>

The challenges for policy makers in regard to an educated workforce are how to structure effective educational institutions, how to pay for them, and how to make them available to all Hoosiers. We must also provide leadership in encouraging people to take advantage of those opportunities. How do we increase the graduation rate? How do we get more students into programs beyond high school? How do we encourage adults to continue and expand their educations? How do we keep more of the people we pay to educate in Indiana? <>

Providing better “tools”, from a public policy perspective, means strategies aimed at both the private and public sector. We must all look for ways to encourage (or at least not discourage) private investment in buildings and equipment for increased productivity. <>

We have also come to accept that certain investments in assets valuable to all citizens are proper expenditures for tax dollars. Roads, streets and bridges, utilities, and public safety services are not just conveniences, they are necessary for economic activity. State and local government in Indiana have failed to prioritize our infrastructure needs for too long. We have to address issues like highways that are inadequate to our economic needs and sewers that don’t measure up to our environmental expectations. <>

The 21st Century has brought some new demands to our infrastructure needs. Threats of terrorism place new stresses and burdens on our productivity. We need to deal with those costs rationally and effectively. <>

Most of the world’s economic growth potential is in information technologies and intellectual property. That includes health care, business practices, communications, entertainment, and a variety of other economic activities. Unfortunately, Indiana is well behind the nation and the world in development of information infrastructures. Our lack of access to fiber optics and wireless broadband is a serious detriment to our ability to grow a modern economy. The technological tools exist. In Indiana, we don’t yet have the political will to make it happen.<>

<>The bottom line is that there is neither reason nor time for Hoosiers to feel sorry for themselves. A better future is available to us. All we really need to do is take a dose of the advice that we give our own children, “Study hard and invest your money wisely.” If we can adopt that advice as public policy, Indiana will prosper once again.

Friday, October 07, 2005

Closing BMV Branches is False Economics

It is supremely ironic that as gasoline prices top $3.00 per gallon, the Indiana Bureau of Motor Vehicles is deciding that thousands of Hoosiers should drive dozens of more miles just to get the services that state government requires of them.

The BMV is completely missing the point. Of course many of us who serve in the General Assembly want to see government costs go down. We have been making the point for years that the cost of operating the BMV is escalating out of control. But the whole point is to save taxpayers money. This isn’t about the sanctity of the state’s treasury, it’s about the cost of living to our citizens.

Today, we learned that more branches across the state are being closed. The reason appears to be that each transaction at those branches costs state government something in the vicinity of 30 cents. So now those affected motorists will have to drive additional distances (up to 30 miles per round trip in some cases) to help the BMV save 30 cents.

Am I missing something here? How are we making Hoosiers better off by forcing them to buy a gallon or two of gasoline out of their weekly checks so that we can save them 30 cents in taxes? Never mind that it may now take another hour of a person’s time to complete the required transaction, even if they show up with all of the proper documents the first time. Never mind that lines in the larger branches will balloon even further. Never mind that the closings will have an adverse impact on the economies of the small towns that struggle so hard to bring people to their business districts.

If the BMV can’t figure out ways to make transactions less expensive, then the bureaucrats should at least hold off on their decisions until the legislature can address reasonable alternatives. Sure – citizens don’t like the idea of paying an extra dollar for each transaction, but most would clearly rather pay the dollar than buy another gallon of gas and spend another hour getting to the branch.

Does anyone else remember that the license branches were once privately operated at a profit with less cost to the taxpayers and motorists than we are spending now? If Indiana can privatize its prisons, wouldn’t privatizing license branches be worth discussing?

Government exists to combine resources so that citizens are better off. Sometimes, bureaucrats forget that. They begin to think that government exists so that they can brag about what they have accomplished. The Bureau of Motor Vehicles needs to look at what is happening across the country and state and work to reduce the burden on the people who, one way or the other, pay the bill.

Wednesday, April 06, 2005

HOW MUCH WILL A NEW FOOTBALL STADIUM AND CONVENTION CENTER HELP OUR ECONOMY?

You should really look at this article. It is typical of the studies that are done by people who are not working for the sports franchises.

The Stadium Gambit and Local Economic Development

By Dennis Coates and Brad R. Humphreys

ECONOMIC DEVELOPMENT POLICY
Volume 23, No. 2

"….the consensus in the academic literature has been that the overall sports environment has no measurable effect on the level of real income in metropolitan areas. Our own research suggests that professional sports may be a drain on local economies rather than an engine of economic growth."

http://www.cato.org/pubs/regulation/regv23n2/coates.pdf


And with regard to convention centers, the net effect might be the same. Click here.



http://www.fieldofschemes.com/sanders.html

Sunday, March 13, 2005

That Trashy Trip to Indianapolis

I have been driving from Hartford City to Indianapolis several times a week since 1988. My trip usually follows I-69 to I-465. I have noticed each year how much more trash accumulates along the road. The last ten miles of I-69 now seems like driving through a badly maintained landfill! Not only are the piles of litter unsightly, but they must send the wrong message to those passing through the state. It would be easy to blame the Department of Transportation (and I do hope they have a plan to deal with the problem) but I don’t understand why there is so much litter.

Hoosiers of all sorts claim to be concerned about the environment, so why do they use the public highways for a dump? By some estimates, a tin can, if not picked up, would still be litter after a hundred years. An aluminum can could last several hundred years, a plastic 6-pack cover 450 years, and a glass bottle virtually forever.

Picking up the trash costs big dollars. Even if we use inmates, someone has to supervise and haul it all away. At a time when the legislature is trying to cut costs without raising taxes, doesn’t it seem to you like properly disposing of your own trash beats raising taxes or limiting school funding?

I never actually see folks throwing things out the window so I have to assume they do it in such a way as to conceal the deed. That would seem to indicate that they already know the practice is not socially acceptable. So help me out here. What can we do to make Indiana highways cleaner, more attractive, and less costly to maintain?

I suppose one answer is the Adopt-A-Highway program. My hat is off to those who are willing to donate their personal time and personal safety to this cause, but why should it be necessary? If we want to stretch our tax dollars and be proud of Indiana, isn’t this one area where we could collectively grow up a little?

Monday, March 07, 2005

IBJ Opinion on the delay in I-Light deployment

I-Light network delayed by state
Daniels administration calls for further study of high-speed system
By Scott Olson solson@ibj.com

Click here to connect to the Indianapolis Business Journal.
The completion of a state effort to expand
Indiana’s digital infrastructure by connecting 15 cities via a fiber-optic network has been delayed as the new administration further studies the project.
The initiative, known as I-Light, began in 1999 and connected supercomputers at
Indiana University, Purdue University and IUPUI.
By harnessing the technological power of the institutions into a grid, the universities surpassed the two-teraflop (trillions of operations per second) mark and increased their computation, storage and visualization ability.
The $5.9 million initiative funded by the state was completed in December 2001 and was the first university-owned network of its kind in the country. Now, the second phase of I-Light, or I-Light 2 as it's called is nearly finished. A March completion date had been expected.
The $10 million I-Light 2 would extend the network’s reach to 12 additional communities throughout the state, providing them high-speed Internet access.
The locations are Columbus; the University of Southern Indiana in Evansville; Fort Wayne; Gary; Jeffersonville; IU at Kokomo; Marion; Ball State University in Muncie; Richmond; IU at South Bend; Indiana State University in Terre Haute; and Vincennes University.
But the administration of Gov. Mitch Daniels is exploring the network’s capabilities before approving its completion,” said Chris Cotterill, general counsel for the Indiana Office of Technology.
“We want to ask some new questions and make recommendations to the governor,” he said. “This fiber could be used a number of different ways, and all options are on the table."
State Sen. David Ford,
R-Hartford City, who spearheaded the effort to fund I- Light, voiced his concern about the decision. He wants the network's implementation to remain close to schedule.
“That’s fine to want to keep all options open, but sooner or later, we need to exercise an option." he countered. "I would hope we could get this back on track fairly soon."
State lawmakers approved the $10 million appropriation last session to fund ILight 2 in three stages. The first, connecting the network’s node on the campus of IUPUI downtown to the National LamdaRail infrastructure that runs through
Chicago, is done.
The state received a $3 million grant from the National Science Foundation to connect to the national network. National LambdaRail is an initiative of universities and technology companies to provide a large-scale infrastructure for research and experimentation.
The track runs from
Seattle to New York City down to Jacksonville, Fla., and back across the country to San Diego and reconnecting at Seattle.
The second phase entails securing the fiber to connect the 12 cities to the state’s network. Rather than lay the fiber, which was done under the original I-Light program that linked the three campuses, the state purchased dormant fiber-optic cables. Known as “dark” fiber, the unused cables were laid by companies looking to capitalize on the technology boom.
Much of the fiber has been secured through a long-term lease with Indiana Fiberworks, a subsidiary of Connecticut based GE Capital Corp. Negotiations for the remaining fiber continue with Level 3 Communications Inc. in
Colorado.
The ongoing discussions, coupled with the cost to “light” the network, also have contributed to the delay, said Dave King, executive director of the Indiana Higher Education Telecommunications System on
Senate Avenue. IHETS—which was formed in 1967 and oversees the Indiana Telecommunications Network that reaches schools, libraries and state agencies—is developing the I-Light network.
Another request for proposals has been distributed in an attempt to get the cost to “light” the network and complete I-Light 2 under the $10 million appropriation. Once the project is finished, which King hopes now will be midyear, the older ITN system will begin to be replaced by the newer and more powerful I-Light network.
King said he’s aware of the administration’s position to want to further study the project before it’s completed.
“That’s certainly the message we’re getting [from state officials],” he said. “That’s the safest thing for them to say at this point. They’re just getting their feet on the ground.”
ITN users generate $21 million in annual revenue to the state, $10 million of which is spent on contracts with telephone companies to gain access to their infrastructure. I-Light users will pay an annual membership fee, yet to be determined, and a cost to hook up to the system, depending upon how much bandwidth they use, King said.
Brian Voss, IU’s associate vice president of information technologies for telecommunications, is confident the project will come to fruition. The system has produced “great results” for IU and the other two campuses, and should extend the benefits across the state, he said.
“We feel the development of the regional optical networks is critical for the state to remain competitive among a broad variety of areas,” Voss said. “What we have now is a slight hitch in processes.”
Supporters say the improved connectivity could attract companies looking to tap into a system capable of high-speed data transfers and real-time videoconferencing.
With access to the National LambdaRail infrastructure, King already has participated in videoconferences originating in
Honduras and Mexico.
“This blue line gets me to
Chicago,” said King, pointing to a map of the state’s network, “and the second stage gets me to the world.”
Cotterill, the administration’s lawyer, said the network must make business sense before it can move forward and needs to be more than just a “cool idea.”
Ford, meanwhile, has introduced legislation this session, Senate Bill 381, that could use $5 million in the current budget request to broaden I-Light’s scope even more. The bill would allow network developers to build wireless transmitters at each of the 15 I-Light node sites to expand the reach 30 miles in every direction. The state would almost be blanketed with broadband access, giving residents in rural areas the opportunity they might otherwise not have to receive high-speed Internet service, Ford said.
The major telephone companies, such as SBC Indiana, oppose the legislation, Ford said, because they think the expanded network would tread on their turf. SBC Indiana already has introduced its digital-subscriber line service to several cities throughout the state. SBC and its competitors are profiting from the arrangement, though, because the state is leasing their equipment to make the hookups, Ford said.
John Koppin, president of the industry’s trade group, the Indiana Telecommunications Association, said he has voiced his concerns about I-Light to the administration and is troubled by some of the language in Ford’s bill.
“While I-Light 2 was sold as a network for high-level research for academic activity, which we still weren’t keen on, because we felt the private sector should be the provider of that service, we sort of bit our tongue and went along with it,” Koppin said. “Now, an effort to expand that into other valuable markets for the industry has us very concerned.”
Ford summed up the importance of ILight’s completion this way: “The reputation of
Indiana, especially for economic development, depends on it.”



Reorganizing Township Government

Here is what the Muncie Star Press had to say about SB 638 which would allow for the merging of Township Governments.