McCrory plan would privatize Commerce

Jun. 08, 2013 @ 04:46 PM

Governor Pat McCrory is hoping to create a public-private partnership to perform economic development and marketing functions that are currently handled by the state department of commerce. 

House Bill 630, would create the North Carolina Partnership for Prosperity, which would be able to accept private and public funding to carry out its mission, according to the bill. 

The House Commerce and Job Committee heard a presentation last week outlining the plan. Rep. Mark Brody, R-55, sits on that committee. 

The organization would work on economic development in all 100 counties, according to a letter given to the committee. The organization was described as “a more nimble, proactive organization.”

The new organization would have a board of directors, headed by McCrory and legislative appointees from both houses.

The approach is not new or unique to North Carolina, Peter Frank, an associate professor of economics at Wingate University, said.

He added that depending on how it is set up and how it receives funding, it could be a good move for the state. 

The letter presented to the committee said that Senior Advisor on Jobs and the Economy Tony Almeida will be developing a plan over the next few months to address development in all 100 counties. 

“We have spent billions of dollars on economic initiatives,” the letter, signed by Commerce Secretary Sharon Decker, said. “However, our efforts have lacked strategic focus, resulting in little positive movement in economic outcomes and results, specifically net job growth.”

The creation of the organization would create one organization for the state to distribute resources, the letter stated. The travel, tourism, sports and film division will retain their two advisory boards for support from their industries. 

Many counties remain in double digit unemployment and have for many years. The statewide unemployment rate was 8.9 percent in April, lower than the March rate, but still higher than other states in the region and the national rate.

Frank speculated that the lag could be for two reasons. 

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“It’s taken North Carolina a while to recover from the types of manufacturing jobs that existed in the state,” he said. He added that furniture and textile manufacturing started to leave about 15 years ago and those workers have been retraining. 

There are positives, however, he said. The biotech area and other industries have been showing growth. 

“In the last five years, the dominoes of finance and financial services, especially in this region, I think it’s hurt North Carolina maybe a little bit more,” he said. 

Economic development works by showing companies that an area has the workforce, resources and other attractive perks, Frank said. However, a main factor tends to be tax incentives. It also helps when the area has supplier industries to support the firm, he said. 

A board of business professionals could be more attuned to workforce potential and industry needs, Frank said. 

Frank could not say if a fully governmental or a private-public partnership model for economic development is more successful. 

It is unclear from the presentation how the new organization would impact local economic development organizations, though it mentions possibly consolidating state-run regional commissions like the NC Rural Economic Development Center. Brody could not be reached for comment before press time.