Waste of the Day: Indiana Gives Shady Corporate Tax Breaks

Topline: The Indiana Economic Development Corporation recently approved $168 million in tax breaks for four data centers, but the state refuses to tell the public which companies will benefit. One data center will likely be built on land managed by Surge Development, whose principal partner sits on the committee that approved the tax breaks.

Tax breaks, data centers, and possible conflicts of interest

Key facts: This May, following public backlash Surge Development pulled its proposal to turn 775 acres of agricultural land into a data center campus. Chris King, Surge’s owner, told the Greenfield Daily Reporter his company needed more time to find tenants for the development.

On June 25, Gov. Mike Braun replaced all nine board members of the Indiana Economic Development Corporation, which helps businesses expand and relocate to Indiana. King was given a seat and admitted to the Daily Reporter, “I’m not the typical type of person who would be appointed to these boards.”

Two days later, the development corporation announced the new tax breaks, which will exempt data centers from sales tax on “qualifying data center equipment and energy” for 35 years. King recused himself from the meeting and did not vote on the tax breaks. 

Some of the tax breaks are believed to help Surge Development carry out its proposal from May, according to Data Center Dynamics, Inside Indiana Business and more. An Indiana Economic Development Corporation spokeswoman refused to tell Inside Indiana Business whether that is actually the case. Instead, the state is using codenames like “Project Louie” and “Project Maize” to conceal which corporations will be exempt from sales taxes. 

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A negative cost-benefit balance

Critical quote: Evan McMahon, chairman of the Libertarian Party of Indiana, said of the $168 million tax break price tag,

Government leaders claim they will create jobs — a total of 180. For those keeping count at home, that’s more than $930,000 in taxpayer money per job being “created.”

Free markets don’t have governments picking winners and losers, nor making deals in secret. Free markets don’t use taxpayer incentives to favor one business over another. They don’t have governments spending billions to buy land and then turn it over to other private companies … They don’t privatize profits and leave the losses on the backs of the taxpayer.

Summary: Indiana’s tax breaks, like most government programs, need far more transparency. Taxpayers deserve to know how their money is being spent.

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This article was originally published by RealClearInvestigations and made available via RealClearWire.