Out with the old

By Scott Mooneyham | Nov 05, 2013

RALEIGH -- A recent report issued by a Washington think tank concludes that Gov. Pat McCrory's move to create a public-private partnership to oversee business recruiting could prove to be a big mistake.

Good Jobs First, a left-leaning research organization founded in 1998, said that creating nonprofits to oversee job recruiting and economic development traditionally led by a government agency could lead to conflicts of interest and a lack of transparency

The reported noted Indiana, which North Carolina is using as a model, saw 40 percent of the jobs promised through its nonprofit economic recruiting never materialize and that the Indiana nonprofit's representative in China has been accused of bribery.

Here's a recommended response for the McCrory administration: That's all you got?

The fact is that a lot of jobs promised as part of state incentives deals, whether arranged by public-sector agencies or nonprofits, never materialize.

Companies make plans for expansion. Circumstances change. Those plans change.

What better not change -- and legislators and the McCrory administration would make the change at the their own peril -- are claw-back provisions in state law designed to prevent companies from receiving tax breaks and other state inducements when they don't deliver promised jobs.

As for bribes offered in China, the report's authors might want to consider this, from  Businessweek: "The temptation to offer a bribe in China is strong because the practice is so common."

That's not to suggest that the McCrory administration's plan to swap out state agency employees for a state-created nonprofit isn't subject to run into a ditch.

Taxpayers deserve to know how their tax dollars are being spent. If a nonprofit is able to use its organizational form to hide its actions, it's likely to veer into scandal.

The stranger aspect of the move is how little heartburn it seems to be causing at the state legislature.

Whether state legislators recognize it or not, what is occurring here is a shift in power from the legislative to the executive branch.

A big reason that will be the result is that a new economic development nonprofit, largely under the control of the governor, will have been created at the same time an old economic development nonprofit, the N.C. Rural Center, is being put out to pasture.

Legislators cut off state funding for the Rural Center after published reports in The News & Observer of Raleigh questioned political influence in its grant-making process and a state audit concluded that compensation to former center director Billy Ray Hall was "unreasonable."

Most of that political influence -- determining how the money was directed -- came from  legislative leaders.

That the Rural Center essentially became a new means for powerful legislators to direct pork to their districts, after old-style pork-barrel bills became unfashionable, may be worthy of censure.

Still, that is what it was, one of the levers of power controlled by the legislative branch.

So, it goes away, and a new lever, with a new guiding hand, is created.