Many unknowns as private organizations take over job recruiting

by Patrick Gannon, The Insider, September 9, 2014.

By this time next month, a private, nonprofit corporation will have opened its doors at a small office building in Cary with a big mission – recruiting jobs to North Carolina and promoting the travel and tourism, film and sports industries.

The Economic Development Partnership of North Carolina is an initiative of the administration of Gov. Pat McCrory, who first announced the idea back in April 2013, when he was still fresh in office. It took about 18 months to put enough pieces in place to launch it.

Two questions will help determine whether the partnership is successful. Will it steer clear of conflicts of interest and scandals that have plagued some other states that have taken similar private economic development routes? And will it attract more jobs and prosperity to the state than the Commerce Department has historically been able to bring?

Those questions will begin to be answered Oct. 6, the partnership's first business day. A month before it opens, much remains unclear. Here are a few things we do and don't know about the partnership today.

We don't know who will serve on the partnership's 17-member board of directors. Members have yet to be appointed by McCrory and House and Senate leaders. A five-member interim board has been guiding its progress to date. We do know that board members are expected to have expertise in various business and industry sectors.

We don't know how much money the "public-private partnership" will raise privately to supplement the $17 million-plus the group will get from state taxpayers annually. We do know the partnership must raise at least $250,000 from private donors before it receives its first $17 million, with additional – and much greater – fundraising requirements in future years. We don't know who the money will come from, but donors must be disclosed.

We do know that 22 people were fired from the Commerce Department without being offered jobs at the partnership or elsewhere in state government. We do know that 29 Commerce Department employees accepted jobs with the partnership. We also know the partnership plans to hire about 30 more people before the end of the year to market the state to tourists, attract film and sports development and recruit companies.

We don't know exactly what economic incentives the state will have at its disposal to help the partnership create jobs. We do know that the partnership itself won't be able to provide incentives but that it will make recommendations to the Commerce Department, which can. We do know that department officials, as well as various groups across the state, are pushing McCrory to call lawmakers back to the capital to consider additional money and authority to offer incentives.

"I'm in need," said Richard Lindenmuth, the partnership's interim chief executive officer.

We also know that other groups that oppose taxpayer-funded incentives are pushing back. We don't know what McCrory will do.

We do know that proponents have said repeatedly that a private organization, not bound by certain state laws and restrictions, would be able to move more quickly and efficiently in dealing with businesses than the public department. Lawmakers who worked on legislation creating the partnership said many times that it would be able to "move at the speed of business" rather than the speed of government.

We do know that Republicans who control state government have been touting recent job-creation statistics in North Carolina and a lower unemployment rate under the current system of economic development. We don't know whether those trends will continue under the new system.