Archives

News

The Economic Development Partnership of North Carolina released the names of the 17 board members Friday that will oversee the state’s new privatized job recruitment system.

The partnership officially launched in October when the state contracted out much of its job recruitment and tourism division to a private group. A central piece of Republican Gov. Pat McCrory’s jobs platform, the public-private partnership approach to economic development has had mixed results in a handful of other states.

Proponents of the structure say moving the job recruitment duties and $16.5 million in public funding out of state government allows for more flexible and faster responses to leads in recruiting jobs to the state. Critics of the partnership say that the privatized structure encourages a pay-to-play culture, where campaign supporters of political leaders are rewarded or successes amplified to boost the public profiles of governors.

Final decisions about financial incentives will rest with the state Commerce Secretary.

North Carolina’s economic development partnership had been operating under an interim board headed by John Lassiter, a Charlotte businessman and former city councilman close to the governor. Lassiter also used to be the chairman of Renew North Carolina, a political-action committee that can accept anonymous donations from corporate donors and individuals to trumpet McCrory’s successes. Lassiter resigned from the group in early 2014.

But Bob Singer, a Greensboro attorney appointed by McCrory to serve on the new economic development group, remains the head of Renew North Carolina, according to 2013 documents filed with the N.C. Secretary of State’s office.

Read More

News

N.C. Commerce Secretary Sharon Decker says the $22.5 million fund to recruit business to the state is nearly empty, with enough money left to cover one additional jobs project, according to the Triangle Business Journal.

Decker was speaking to a group of commercial real estate developers at the Umstead Hotel in Cary when she made her comments about the state’s Job Development Investments Grants (JDIG) program.

Lawmakers did not fund the incentive program at levels desired by state commerce leaders, and Gov. Pat McCrory has said he is considering calling lawmakers back to Raleigh before their scheduled start in January for the long session.

From the TBJ article:

“And without JDIG, we will not be competitive,” N.C. Commerce Secretary Sharon Decker told members of Research Triangle chapter of NAIOP at its meeting Nov. 7 at the Umstead in Cary.

The JDIG program, since its inception in 2002, has been used by state economic development recruiters to sweeten the pot for companies that are considering a major investment in North Carolina that would lead to the creation of net new jobs in the state.

JDIG has typically been reserved for the largest new jobs deals, and pay-outs are only made after the company reaches a minimum job creation goal. Local companies that have been awarded JDIG grants include MetLife, Ipreo, Sygenta Biotechnology, Allscripts Healthcare and HCL Technologies.

Decker warns that the state is dangerously close to losing its chance to even negotiate on potentially large job-producing deals, including three big economic development prospects that are considering expansion and relocation options in the Triangle that could add another 4,100 jobs in region

You can read the entire article here.

Uncategorized

Update: Both the Senate and House passed versions of the bill Thursday on second readings, with the House tacking on language placing the economic development partnership back under state ethic rules. The proposals will be back next week for final passage in each chamber.

Parallel bills to privatize pieces of the state’s economic development work is on the path to approval at the state legislature, with changes emerging Tuesday that lower the private fundraising requirements and restrict some of the transparency measures.

The Senate is supposed to consider the bill on the floor today.

N.C. Commerce Sec. Sharon Decker

N.C. Commerce Sec. Sharon Decker

The most reason versions of the 19-page House Bill 1031 and Senate bill 743 would also reduce the required amount the Economic Development Partnership of North Carolina must raise from private funders, leaving the group to raise $6 million from private funders over the next five years.

(To read the entire bill, click here.)

Taxpayers are expected to contribute $90 million over that same period. That’s if Gov. Pat McCrory’s request to transfer 67 positions and an estimated $18 million next year to the new group from the Commerce Department is endorsed by lawmakers in budget negotiations.

Draft legislation had initially put the group on the hook to raise $10 million from private sources immediately, but the language endorsed by House and Senate committees will lower that to $6 million over five years, a move that Republican sponsors is more realistic for a startup group.

The privatization proposal would set North Carolina on a path of its economic development that a dozen other states have embarked on, with mixed results. The public-private partnerships, sometimes referred to as PPPs, have come under fierce criticism in other states with accusations that the private setups have wasted taxpayer money, exaggerated job claims and been used to reward political campaign donors and supporters.

The current form of the bills also remove provisions putting members of the nonprofit’s board and top employees under state ethics rules, which require an annual public disclosure of financial interests as well as put in varied prohibitions on accepting gifts and performing favors. The ethics law also attaches criminal penalties for accepting money or gifts from those looking to s curry favor from public servants. (Click here for a background story). Read More

Uncategorized

jobseconomyDon’t get us wrong; it’s almost always great whenever a new employer is creating jobs in North Carolina. And the phenomenon of politicians claiming credit for job creation is nothing new; everyone likes good news and wants to be around when it’s delivered.

That said, today’s press release from the office of Governor Pat McCrory announcing the expansion of a plastics manufacturer in Henderson County borders on the ridiculous. This is from the release:

“Governor Pat McCrory and N.C. Commerce Secretary Sharon Decker announced today that Elkamet Inc. is expanding its North Carolina manufacturing operations in Henderson County.  The company plans to create 20 new jobs and invest more than $2.5 million over the next three years in East Flat Rock…. Read More

NC Budget and Tax Center

In good news on the government accountability front this week, Governor McCrory and Commerce Secretary Decker put the brakes on privatizing the state’s economic development efforts, postponing the creation of the new nonprofit development corporation until the start of the new fiscal year in July. Ostensibly, the move is intended to make sure the transition to this new public-private partnership goes as smoothly as possible, given the catastrophic mistakes and complete lack of accountability suffered by other states when trying this approach. And the legislature would like to weigh in as well, given that the authorizing bill for all this never passed last year.

So it’s worth taking advantage of this pause in the rush to privatization to ensure that the state’s economic development efforts remain both effective and accountable. Fortunately, North Carolina has a long tradition of accountability in business development, a point made in a well-timed study released this week by national economic development watchdog Good Jobs First, and this is a tradition the state should continue.

According to the report, the Tarheel State has the third best accountability system in the country in terms of monitoring and disclosing whether companies live up to their promises of job creation.

This is a tradition that the state needs to continue and extend to the activities of the new development corporation, including the private sector donors and the proposed closing fund.