What Trump-era Economic Policies Mean to the Mayor of U.S. Steel’s Hometown

Gary, indiana Mayor Karen Freeman-Wilson speaks during her 2018 State of the City address in February.

Gary, indiana Mayor Karen Freeman-Wilson speaks during her 2018 State of the City address in February. Team Gary via Facebook

 

Connecting state and local government leaders

Gary, Ind. Mayor Karen Freeman-Wilson spoke with Route Fifty about the what she dislikes and likes about the tax overhaul, steel tariffs and education, as well as being sued for being a “welcoming city.”

While it may be too soon to judge the impacts of Trump-era economic policies, Gary, Indiana, a steel-focused town in the heart of the Midwest, seems to be the sort of place that would be receptive to the president’s rhetoric around restoring manufacturing, if not his actions.

In an interview with Route Fifty, Karen Freeman-Wilson, Gary’s mayor, appeared to remain skeptical about whether the recent overhaul of the tax system, as well as the announcement of foreign steel tariffs, will benefit her hometown.

Freeman-Wilson, a Democrat, opposed the GOP-led tax overhaul that became law just before Christmas, and remains that way to this day. She made it clear prior to the tax bill’s passage she thought the bill would be harmful to “middle-income families in many states” and could hurt cities’ bottom line in a multitude of ways.

Freeman-Wilson told Route Fifty the elimination of a tax exemption for advance refunding bonds, which allowed governments to refinance and restructure outstanding debt, is "one of the things that worries me most.”

“That’s a moneysaver for a lot of municipalities,” Freeman-Wilson said. “And maybe it’s only $100,000 or $200,000, sometimes half a million [dollars] but for a municipality like ours that’s smaller, that’s had challenges with resources, that’s a lot of money.”

Several national organizations, including the National Association of State Treasurers and National Association of Counties, are advocating to have that tax exemption restored.

Freeman-Wilson was optimistic about a newly-minted program in the tax bill that would create “opportunity zones.” These opportunity zones, which are to be designated by governors (and the mayor of the District of Columbia) this week, would allow private investors to defer taxes on capital gains for nine years if they invest it in one of these economically distressed, designated zones.

“From my perspective that’s the one hidden gift in that tax bill,” Freeman-Wilson said about the provision. “We believe that through the designation of opportunity zones in our state that it will provide an incentive for development in Gary, because we’ve had challenges getting developers to come to Gary for a variety of reasons.”

She did note that the designation remained out of the local government’s hands, and that could be a concern for some localities. For instance, a governor could not designate an area for the program as a “retaliatory measure.”

Freeman-Wilson did not see that a concern for Gary, though.

“We have a great relationship with Governor Holcomb,” Freeman-Wilson said. “I think we were the first folks to bring that to his attention that that portion of the bill existed and we have been in constant contact with our governor to determine which areas should best be designated in the city of Gary. So I am optimistic about that portion of the bill.”

As the “the home to the flagship plant of U.S. Steel,” Trump’s recently announced tariffs on imported steel some would perceive as a home run for Gary. From Freeman-Wilson’s perspective, however, it’s a mixed bag.

“… [T]here are some positive aspects to that, but ultimately you have to look at how it all pans out,” she told Route Fifty. “You know, you might help one entity and hurt a number of them thereby creating a net negative effect on your community.”

“While I’m excited for U.S. Steel—they’re our largest taxpayer, we have a symbiotic relationship with them—I am cautious about the impact that it will have not only on other manufacturers in our city, but other manufacturers in this entire state of Indiana.”

Freeman-Wilson serves in leadership roles in both the U.S. Conference of Mayors and the National League of Cities.

Watch the full interview or check out our other key takeaways below.

On a Lawsuit Against Gary, Indiana’s ‘Welcoming City’ Ordinance:

“The lawsuit alleged that we created ourselves or designated ourselves a sanctuary city. That is not the case. And, to the extent that the plaintiffs have attempted to essentially use Gary as an example, then I think they’ve picked a poor example and I’ve made that clear to both those who refer to it and to our constituents.”

“Obviously, there is always a concern when you have a city like ours that gets sued and has to expend resources on a frivolous lawsuit, but the good news is that we have had others to come to our rescue and to really come to our defense because they understand what we’re trying to do. We are a city of immigrants. Gary was founded by immigrants. Now, you know, the generations have been removed for some of us and some of us were in fact born in the US, but I don’t think we should ever forget our heritage.”

On Education:

“One is to focus on the needs of the future employers, to focus on the needs of the community colleges, the four-year institutions, what are they looking for in students, but most importantly to focus on the individual students. Not to make decisions so quickly about where they should be. I mean, just because you get a C in math doesn’t mean that down the road you can’t be a coder.”

“I think so much about education right now is focusing on standardized test and how do you group people together. If you spend more time really finding out what students’ passions are, then I think:  one, you’ll find that they are more successful and more interested in schools, and, two, you can match them and … guide them towards the right careers, and college if that’s appropriate.”

Mitch Herckis is a Senior Director of Programs for Government Executive’s Route Fifty and is based in Washington, D.C.

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