Companies looking for city tax incentives when moving to Indianapolis or expanding here would have to pay employees at least $18 an hour and eliminate employment barriers like access to child care, Mayor Joe Hogsett and workforce development officials said.

Those requirements are part of the framework for a new economic strategy, which would take effect Jan. 1, that revamps how the city awards incentives in the form of tax abatements and training grants.

Announced Thursday at Ivy Tech Community College, Hogsett and the city's workforce development partners like the Indy Chamber hope the policy changes will increase access to economic opportunities for struggling middle- and low-income families, create pathways for upward mobility, and address disparities by race and class.

“We cannot, we must not celebrate limited prosperity,” Hogsett said.

City officials said the strategy promotes inclusive economic growth and equity. It isn’t immediately clear how the changes will affect the desire of corporations to move or expand in Indianapolis. One company represented at the announcement, software firm Genesys, supports the initiative, said its head of human resources Tracy Cote.

Program could be rolled out by early next year

Develop Indy, the city’s economic development arm, will spend the rest of 2019 working on policy metrics with the hope that the full program will be in place at the beginning of next year.

Criteria such as pay and employee access to child care and job training aim to open the job market to people who are otherwise struggling to find and retain work, said Angela Smith Jones, Hogsett's deputy mayor of economic development. Other priorities include support for workforce training programs and job investment in distressed and underserved neighborhoods.

"Our goal is to have corporations really focusing on their corporate responsibility and really engaging in the community," Smith Jones said.

Hogsett's Republican challenger in this year's mayor's race, Jim Merritt, said in a statement that he lauds the work of the chamber and other organizations in the policy announced Thursday and said it "would be the start to closing the gap of economic disparity in Indianapolis."

And while Merritt said he would be open to moving forward with the effort should he win in November, he said Hogsett's role should be viewed through a political lens.

"He is claiming credit for the good work of community partners with which he has had little to do," he said.

Conversations, analysis went into tax incentive policy

Ian Nicolini, vice president of Indianapolis economic development for the Indy Chamber and head of Develop Indy, said the tax incentive policy reflects ongoing conversations with stakeholders around the city and an analysis of best practices in other markets, he added.

He said the initiative would also change how the companies applying for tax abatements are evaluated.

“There’s no explicit mention in our tax abatement policies about inclusive outcomes,” Nicolini said. “We’re changing that today.”

Tax abatements, which he described as the “bread and butter” tax incentive offered to businesses, are used to offset tax obligations for economic development investments that create or support jobs.

Eligible job projects would provide a sustainable wage and health care benefits for families, which demonstrate a positive return on investment.

Instead of focusing only on the number of jobs created or retained, the city will also look at local hiring; the participation of businesses owned by veterans, minorities and women; and the location of companies.

The hourly wage requirement stems from a 2018 report released by the Metropolitan Policy Program at Brookings in conjunction with the Central Indiana Corporate Partnership.

According to that report, “good jobs” — or jobs that help improve the earnings of people without four-year degrees in Central Indiana — pay at least $37,440 per year, or $18 an hour, and provide employer-sponsored health insurance. The report also calls for the creation of a community impact network, which Smith Jones said would identify disenfranchised job candidates as well as their barriers to employment.

“That gets about three-quarters of workers out of struggling status. That’s an important number," Nicolini said. “If we’re leveraging out incentives to create those type of opportunities then we’re building out the kind of workforce that we can sustain and that our companies can retain.”

Contact IndyStar reporter Alexandria Burris at aburris@gannett.com. Follow her on Twitter: @allyburris.