News Column

Hamilton, Catlin question Commerce privatization plans

February 25, 2014

By Molly Parker, Star-News, Wilmington, N.C.



Feb. 25--At least two local lawmakers are urging caution as the N.C. Department of Commerce looks to privatize its job recruitment functions.

Rep. Susi Hamilton, D-New Hanover, said she's particularly concerned with what she sees as Commerce's lack of a plan for attracting private dollars to its new nonprofit, the Economic Development Partnership of North Carolina Inc.

"I don't mean a plan to have a plan," Hamilton said Monday. "I mean show me the money. Where is the private sector? I'm not the only one to question this."

Hamilton first raised her concerns at a recent meeting of the Joint Legislative Economic Development and Global Engagement Oversight Committee.

Hamilton said that it's the legislature's job to "appropriate and govern and manage the expenditures of public dollars." She said "we (lawmakers) just can't be expected to turn over that responsibility."

Commerce spokeswoman Kim Genardo said it's important to realize that the partnership is in its infancy -- its board of directors met for the first time last week -- and said the news going forward "is not one representative's complaints about something but the building of something new and exciting for North Carolina."

Still, John Lassider, chairman of the board of directors for the partnership, said Hamilton asked "fair questions" about fundraising. Lassider said the board is following directions put forth in a Senate bill that didn't pass last session -- primarily over a question about tying revenue from hydraulic fracturing to provide a revenue source for the partnership -- but is expected to be readdressed in the short session beginning in May. That bill was cosponsored by Hamilton.

Lassider said the partnership under the direction of Richard Lindenmuth, the recently named interim chief executive officer, will begin speaking with investors once there is concrete plan to determine how much of the resources currently provided to Commerce are transferred to the partnership in such areas as sales and marketing, international trade and travel and tourism.

"We don't want to start communicating with potential investors until we can walk through our action plan," Lassider said. "We very much plan to seek private investment ... but we're not going to start that too early because we need to make sure we can explain exactly how their money is going to be spent."

Commerce officials have reportedly told lawmakers the move of five Commerce divisions won't begin until around July, later than previously expected.

"My experience is speed is not good if you want to do things well," Lindenmuth said recently, as quoted in the News and Observer. "The other part of speed is that it's very hard to communicate and be transparent to those people who are interested and concerned that we are doing the right things."

Rep. Rick Catlin, R-New Hanover, said several of his concerns were vetted during the meeting of the oversight committee in Raleigh. He noted that roughly a dozen states have implemented various iterations of Commerce's privatization plan, but "no conclusive study says it's a benefit."

Catlin also said he's had concerns about potential conflicts of interest, limited private sector involvement and growing pains.

But Catlin says he's still thoroughly studying the plan. "It's our job to look into the details and ask questions," said Catlin, who also is a member of the oversight committee that met recently in Raleigh.

Sen. Bill Rabon, R-Brunswick, also weighed in on the plan, saying the short session will be time to "knuckle down" and work out the details.

"I think it's a good starting point," he said of Commerce's plan to date. "We're at the drawing board."

Rabon said a solid privatization plan still has to be paired with other measures to make the state more business friendly. He named a well-oiled transportation system and prudent state taxation scheme among those things. Rabon also said it's important to court businesses already in the state with an eye toward expansion, adding: "You dance with the one that brung you."

Metro desk: 343-2384

On Twitter: @StarNewsMolly

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Source: Star-News (Wilmington, NC)


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