Economic Issues


Both Transylvania County and the state of North Carolina have decided to move economic development responsibilities from governmental departments to nonprofit private organizations initially funded by taxpayers. Two issues that need to be addressed are accountability/transparency and obtaining private sector funding.

At the state level, the Economic Development Partnership of North Carolina has been created by the Legislature. In the past, business recruitment was done through the state’s Department of Commerce. But state officials, including Department of Commerce Secretary Sharon Decker, said that due to state rules and regulations, the department could not respond quickly and adeptly enough to bring some businesses to the state. This new organization supposedly will be more agile in recruiting businesses and marketing the state as a business and tourist destination.

Locally, the county commissioners have decided to establish an Economic Development Organization (EDO) to oversee economic development.

Accountability and transparency issues have been raised regarding the state’s new economic development mechanism. For the past several years, governors of both parties have issued numerous press releases touting business expansion or recruitment due to the efforts of the Department of Commerce. The nearest example came when former Gov. Perdue praised the state’s efforts in luring Sierra Nevada brewing to Mills River. In the last year, state leaders also have constantly repeated that employment is increasing in the state. So, if employment is increasing and the Department of Commerce has been successful in recruiting and expanding businesses, why establish a new entity to handle economic development?

Transylvania County is a different story. The county lost hundreds of manufacturing jobs around the turn of the century and only a few smaller manufacturers have moved in. There have been a few success stories, but not many, and the latter is partly due to “a lack of sufficient investment in economic development,” according to consultant Jeannette Goldsmith. To their credit, the county commissioners have moved forward by setting aside $500,000 for economic development. Eleven people have been nominated to serve on the EDO board. But just as with the state, questions of transparency and accountability must be answered.

This issue should be more easily resolved at the local level. Most residents personally know at least one or two people who have been nominated to the EDO board, making it easier to hold board members accountable. And in a county of roughly 30,000, it should not be too hard to see where and if the money is being spent productively. The state is more complicated. It’s very difficult to follow millions of dollars, particularly when people in Wilmington may have no idea what economic development is occurring in Rutherfordton or vice versa. With more money and people involved, it’s easier to be less transparent and shift any blame to other parties.

Another issue for both entities is raising money from private sources. Earlier this year, Rep. Susi Hamilton, a Democrat from Wilmington, inquired as to why there was not more information available from the state about private donations.

“There’s not a plan out there that we’ve been shown that would make me feel comfortable about a state appropriation being handed out to a private entity,” she told the Raleigh News & Observer. “It’s not a public-private partnership if only the public is contributing money and resources.”

Theoretically, it would benefit businesses to contribute to such an organization that would improve business overall. In practice, however, many businesses do not contribute unless they see a specific benefit for themselves. For example, Arizona reportedly has seen less than 1 percent of its economic development operating budget come from private donations.

Obtaining large amounts of private funding may be more difficult locally. Goldsmith recommended that the EDO be funded 70 percent by public funds and 30 percent by private funds with the funding eventually moving to a “50-50 funding split.” Right now only the county is providing the funding. Since there are just a handful of somewhat large businesses in the county, it’s hard to see how the private sector could contribute $250,000 a year to help fund the EDO or help create “product.”

We hope the county and state are successful in their endeavors and in pursuing economic development they will establish prodcedures to ensure transparency and accountability and set realisitic goals regarding private contributions.


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