RALEIGH Gov. Pat McCrory’s top job recruiter offered new details about the administration’s strategy to revive the state’s economy Wednesday, telling lawmakers that North Carolina must streamline its efforts and return to its roots to reduce the high unemployment rate.
Commerce Secretary Sharon Decker said the administration’s plan to privatize major elements of the state’s economic development effort is needed to kickstart an idling economy with a 8.9 percent jobless rate, the nation’s fifth highest.
“Although we’ve spent a lot of money and we’ve done a lot of good work, the needle isn’t moving, so it says to me we’ve got to do things differently,” she said.
“As you look at the history of North Carolina, our core has been agri-business, manufacturing, small business and entrepreneurship,” she added. “In this plan ... we’ll go back to our core, and that’s primarily how we will get out of this fiscal situation, by focusing on what we know and know well.”
The McCrory administration announced in early April a blueprint to refocus the state’s job-recruitment energies by consolidating regional and external entities and creating the N.C. Economic Development Partnership, a private nonprofit, to help guide the effort.
It’s the administration’s most comprehensive move yet to address the state’s economic situation. McCrory said in the 2012 campaign that he expects to see North Carolina’s unemployment rate fall lower than its neighbors at the end of his term and beat South Carolina after his first year in office. South Carolina’s seasonally adjusted jobless rate for April is 8 percent, nearly a full percent better than North Carolina, according to federal figures.
Decker’s presentation came as the state released new unemployment data. The seasonally adjusted numbers show that unemployment improved in just 32 of the state’s 100 counties in April with another 20 constant since March. Graham County in the western part of the state has the highest jobless rate at 16.5 percent.
House lawmakers pressed Decker on how the new economic development strategy would help rural areas such as Graham that are experiencing chronically high unemployment.
“We don’t want to get lost in the shuffle because we don’t have a lot of voices,” said Rep. Chris Whitmire, a Brevard Republican.
Decker, who lives in economically depressed Rutherford County, assured lawmakers that “rural North Carolina needs to be at the center of the state’s focus.”
Creating prosperity zones
The proposal adopts a model advancing in a separate Senate bill that divides the state into eight “prosperity zones” to encourage regional collaboration. Each will develop its own economic development strategy in coordination with a statewide plan.
James Kleckley, the Bureau of Business Research director at East Carolina University, said in an interview that he is worried about the commerce reorganization and the new zones.
“When you have a rural community, it may be somewhat more difficult to get attention,” he said. “It’s troublesome.
“In a lot of ways rural areas can face different hurdles than what you face in urban areas,” added Kleckley, who seasonally adjusts the county unemployment data. “Not just population loss but in difficulty of getting businesses to relocate there.”
The full details of the public-private partnership remain unclear as lawmakers and administration officials continue to meet behind closed doors to draft the enabling legislation. But Decker gave the House Commerce and Job Development Committee a more comprehensive outline of the effort, saying the bulk of the transition could take place by the end of the year.
Under the plan, the private partnership would assume the commerce department’s role in guiding tourism, travel and international trade development, as well as taking over responsibilities from regional economic development commissions.
Other outside entities, such as the N.C. Rural Center and part of the N.C. Biotechnology Center, could also move to the new private nonprofit, which would be governed by an oversight committee of political appointees. Decker envisions a more limited role for these organizations, saying they could operate under a state contract.
House lawmakers expressed concern about eliminating the regional partnerships in favor of these new zones. “My concern is we have a lot of really good things going,” said Rep. Susan Fisher, an Asheville Democrat. “If we are doing a good job, why should we have to reinvent them?”
A new brand for N.C.
A major component of the commerce overhaul is a new branding campaign for the state. Decker said she expects to hire an outside firm to do the work later this year and launch it in June 2014 to coincide with the U.S. Open golf tournaments in Pinehurst. “Millions of people around the world will have visibility to North Carolina, and it’s a perfect time to introduce that brand in a way that will be seen worldwide in one fell swoop and very effectively,” Decker said.
Republican lawmakers also pressed the issue of using taxpayer-funded incentives to help private business, a matter complicated by the new private partnership. “You have kind of this swirl of private and public money that concerns me,” said Rep. Chris Millis, a Hampstead Republican.
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