BTC REPORTS: Getting it Right - Three accountability challenges in Gov. McCrory's proposal for partially privatizing the Department of Commerce

By Allan Freyer
Public Policy Analyst, Budget & Tax Center
July 2013

North Carolina lawmakers need to ensure that a new, partially privatized effort to attract and retain businesses, proposed by Governor Pat McCrory, has strong safeguards against conflicts of interest and is accountable to the public if it fails to deliver on job creation goals and other promises underwritten by taxpayer dollars.

Although much remains publicly unknown about the precise organization of the proposed “Partnership for Prosperity,” a review of the proposal’s enabling legislation (Senate Bill 127), public statements and memos by administration officials, and the track record of other states with privatized economic development initiatives reveals three accountability challenges in the current proposal. These three accountability challenges include:

  • Possible conflicts of interest in the prospect-selection and incentive-granting processes;
  • The importance of holding the Partnership accountable for performance through concrete outcome measures on an individual project basis and on overall economic conditions;
  • Concerns about the ability of Prosperity Zones to adequately fulfill regional coordination and planning requirements outlined in the enabling legislation.

Lawmakers need to address these accountability challenges now, before the new Partnership launches, in order to ensure it protects scarce public dollars and does not compromise the state’s reputation as a national leader in accountability measures for public economic development activities.

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