The Interim Study Committee on Fiscal Policy recently met to hear testimony regarding Regional Development Authorities (RDA), which are separate bodies formed to assist in the coordination of local efforts concerning projects of regional importance and provide funding for those projects. Indiana law provides that an RDA may be created by one or more adjacent counties and qualified cities in adjacent counties.

During the 2019 session, Rep. Todd Huston (R-Fishers) amended SB 565 to restructure how RDAs form, operate, receive and disperse funding. The amended version of the bill passed the House, but the Senate stripped the language in favor of studying the issue this fall.

The Accelerating Indiana Municipalities (AIM) organization, mayors and business industry leaders want state lawmakers to establish a framework for a type of regional development authority they have dubbed an “investment hub”, a concept Huston’s amended bill attempted to codify. While there is wide consensus about promoting regionalism, not all mayors – including Indianapolis’ Joe Hogsett – agree entirely with the investment hub approach.

In short, the proposal would allow at least two neighboring jurisdictions – counties and/or municipalities – with a combined population of at least 100,000 to create an investment hub. Each jurisdiction would be committed to participate for at least 12 years and impose on its residents a new local income tax, sales tax or food and beverage tax. Half the tax revenue goes to the jurisdiction that collected it and the other half goes to the hub.

The Indiana Chamber supports counties and other local units working together on a regional basis to spur economic development. Regional cooperatives executing transformational projects are necessary for the long-term health of Indiana’s economy – namely attracting and retaining talent in areas of the state that are experiencing increased net outmigration.

During the hearing, the Indiana Chamber testified in favor of revising the RDA statute but emphasized the need for local jurisdictions to have flexibility and discretion for how they raise their share of the revenue to participate in the RDA and that those making the financial decisions can easily be held accountable. The Chamber also believes that any regional cooperative or project should attempt to “stack” incentives, specifically look for opportunities to leverage federal grants like those issued by the U.S. Department of Commerce for opportunity zones.

No action was taken by the committee, but the Indiana Chamber will remain at the forefront of engaging on this issue and is currently working on its version of RDA legislation that it intends to share with lawmakers in advance of the 2020 legislative session.

Resource: Adam H. Berry at (317) 264-6892 or email: [email protected]