New law to offer grants to counties with high unemployment

Indiana counties with high unemployment rates might be able to apply for grants to help economic development.

A bill signed by Gov. Mitch Daniels on Wednesday will give grants to economic development corporations in Indiana counties where the unemployment rate exceeds the state unemployment rate by 2 percent.

The state unemployment rate hit 10 percent in March, and 32 out of 92 counties in the state will be eligible for the grant, said State Representative Nancy Michael, D-Greencastle, who helped introduce the bill.

Eighty-five counties in Indiana have an unemployment rate that is more than 8 percent, Michael said. Monroe County has an unemployment rate of 6.3 percent, and this is the second-lowest rate in the state, she said.  

“The goal was to recognize that there are counties with an unusually high unemployment rate,” Michael said. “There are situations when the corporations are close to closing a deal with a company that is looking to relocate and construct or bring their business to Indiana, and a lot of times, because of the lack of money in their budgets, they don’t have the finances to actually close the deal.”

Michael said the bill specifies that the grant funds are to be used in recruitment areas of the budget, such as sending people to meet with company officials face-to-face, and not for general operating costs.

She said economic development organizations that serve one county will be eligible and can apply for a $50,000 grant, and organizations that serve at least two counties will be eligible to apply for a $75,000 grant. Indiana authorities will appropriate the money, and the money does not need to be paid back.

Michael said she wants to target the highly distressed areas in Indiana. She added that the economic organizations work to recruit a variety of companies.

“They work with manufacturing, technology parks, medical corporations – it’s about research and development, data centers, nanotechnology centers,” Michael said. “It’s all about bringing in investments and being able to recruit businesses that will provide ones.”

Michael said Elkhart, Ind., has an unemployment rate of 18.8 percent and will be eligible for a grant.

Brian Gildea, economic development manager for the city of Elkhart, said the City is looking to diversify the economy and will not only look at the types of companies that want to expand in the city, but the pay scale as well. Gildea said a type of financial aid like the bill proposes would be beneficial to Elkhart.

“The tools we really have are geared to help businesses that are getting financing with an expansion,” Gildea said. “With credit, the challenge is financing period. Alternative financing would be helpful.”