by JLF Staff
The EDGE Committee met on Thursday, November 2nd. The purpose of this committee is to “examine, on a continuing basis, economic development and global engagement issues and strategies in North Carolina in order to make ongoing recommendations to the General Assembly on ways to promote cost-effective economic development initiatives, economic growth, and stimulating job creation in the global economy.” Below are some of the key issues identified during the presentation and debate.
Committee Members: Click Here
Committee Meeting Documents: Click Here
Chairing – Representative Susan Martin
Senator Brown (Co-Chair): Many bills introduced last session, but nothing really moved forward. Want to come up with something with consensus in this committee to move forward with in the short session. During the January meeting, we will learn what was introduced in the last session and have that discussion.
Presentation: Secretary of Commerce Anthony Copeland
Department of Commerce Strategic Plan & Economic Development Grants
Sen. Bryant: Is CSX on track? Is there anything happening regarding megasites?
Copeland: Can’t say everything to respond to those questions. Do see light at the end of the tunnel in her area (Nash, etc.). Will continue to monitor that. Hoping that soon, some of these megasites will not be empty. Shouldn’t stop with just the megasites that we have.
Rep. Goodman: Pleased to hear rural v. urban econ. Development concern addressed. Natural gas has been serious issue in Montgomery. Would you comment on that?
Copeland: Need to work together with you to put these pieces together, because won’t find the $40m in one spot. Leadership in state, local, and federal will need to work together. Also, gas companies and private sector (broadband, etc.) will play a part in this.
Rep. Goodman: Wants a plan with specific goals, and willing to participate in this
Sen. McKissick: Greatest challenges and opportunities to department? How can we help?
Copeland: Just the Dept. of Commerce has been reduced by $34m, and doing the same things as trying to do before. Bringing in and professionalizing staff is important, and want to continue to do that. Want to beef up other things in Department and have ability to do that. Strapped for money to bring in young talent.
Rep. Conrad: We are one of urban areas that have been struggling (Winston-Salem area) that hasn’t seen same growth as, say, Mecklenburg. Largest employers are two hospital systems. Why do you think that is?
Copeland: Largest employer used to be traditional industry (tobacco). Looking at many towns and areas that got disproportionally hit when some sectors declined (manufacturing and ag). It takes time. If you look at megasites, some have been worked on for fifteen years. Winston-Salem area will be back up.
Rep. Conrad: Suggestions to take back to community?
Copeland: Adjust to a disruptive economy forever. People will have multiple jobs with many companies. Talent is number one reason companies will go somewhere. Areas can give incentives, but if talent isn’t there, they won’t go.
Senator Brown: To transform NE NC and SE NC and WNC will take a lot of teamwork, and economic development will be a big part of that. How do we make it sustainable in those areas?
Copeland: Small and large companies complement each other, and it’s crucial to get large manufacturing companies back in these areas. Can be anchor in area that brings stability and benefits, and NC needs to incentivize companies to go there. It isn’t one size fits all- need to continue to help small businesses, but also bring large companies.
Senator Smith-Ingram: Referenced findings of JDIG and One NC from Task Force. Any analysis on what needs to happen with incentives to help rural areas?
Copeland: Caution on putting emphasis on incentives to boost rural areas – also takes talent and other factors.
Senator Edwards: Employers say they just can’t find enough help. Education industry says they don’t have enough teachers, police force says they can’t find enough officers, etc. Businesses say they can’t find the talent: Skills Gap. Do you have an answer or vision about how we can work to close skills gap?
Copeland: If you look at companies that are wildly successful, they are spending money on upskilling employees, since technology is changing every day. For banking industry, claimed to be hurting more due to lack of talent as opposed to high regulation (Dodd Frank). We will never win at the skills gap, but we just need to be working harder and faster. Apprentice programs in companies and outside of companies.
Senator Edwards: Copeland said tier system worked OK, but I have a different opinion. I don’t think we should necessarily abolish tier system, but would suggest that tier system should be revamped. Respective tiers/counties in tiers aren’t equal.
Sen. Smith-Ingram: Any collaborative effort between Dept. of Commerce and DOT to improve infrastructure? What is being done to address economic distress is tier 1 counties?
Copeland: I can’t appropriate a nickel. I would work with this body to put money in these areas for infrastructure.
Presentation: Christopher Chung, CEO, EDPNC
Economic Development Partnership of NC Performance Measures
Mission: Economic interests in NC’s 100 counties and state’s citizens
Areas companies sometimes struggle with are permitting, skills gap, and customers.
Budget and Structure:
Most of their money is spent on tourism (see pie chart on slide 13)
Performance metrics and goals (list and chart on slides 17 & 18)
Rep. Goodman: Typically, most efficient way to have customers is to keep current customers. For smaller businesses, access to capital keeps them up at night. Maybe the state could provide a tool for access to capital- maybe offer a match for businesses that need capital to get capital.
Sen. Tucker: What penalty it puts upon you with $20m cap in JDIG grants?
Chung: Ohio has nearly identical program as JDIG, but without a cap. If you’re forcing a choice using a cap, it may not have a good outcome for rural areas (because then they must pick and choose). Would look at bigger deals, rather than smaller deals, because that gives more bang for the buck.
Sen. Tucker: Regarding the policy decision that a JDIG grant required 150 jobs, or something to that effect. Some education needs to be in Econ. Development field and among legislature about flexibility that perhaps should be offered on the caps (especially among tier 1 & 2 counties).
Rep. Brody: How do states like Illinois, specifically around Chicago, get large company headquarters? NC has a better tax structure, business climate, etc. What can NC do to break that anchor, because we have so much to offer?
Chung: It’s more difficult for headquarters, because they have employees and executives that have invested in living in that area, and may not want to relocate…so it’s harder to poach those. However, NC is the beneficiary of some companies that have decided to pick up and move. It can happen, but there will likely be a lot of other issues causing frustration that are in the mix. Quality of life, good tax structure, good climate, do cause NC to be in the lead when companies are determining where to relocate.
Presentation: Napoleon Wallace, Deputy Secretary for Rural Economic Development and Workforce Solutions
Rural Economic Development Division Grants and Reports
Outlined funding process
Solutions to Economic Development Issues:
Food processing initiative
Place-based strategy (i.e. Broughton Project in Morganton)
Community Development Block Grants (CDBG)
Disaster Recovery (Commerce is managing a few programs within this)
Sen. Brown: Some of the rural areas cannot afford to hire an economic development expert, so it’s a county manager. How are you addressing this?
Wallace: Cake analogy- you can have the right ingredients and tools, but if you don’t have the right recipe, it’s going to be hard to make it the right way. Then, once you have the cake baked, how do you sell it? Regional reps have been helpful.
Rep. Ross: Referred to Lidl (grocery and distribution center). There’s been a greater effort to collaborate with local governments and across lines. Efforts should continue to be taken among multiple sources across county/jurisdictional lines –> (cake analogy) we saw a great recipe with Lidl
Retail is a big part of communities’ strategies to grow economy
Prioritize industries/certain sectors (in retail, probably see less dollars per job)
Not meeting in December, but there will be internal working groups. Maybe bring in examples of people on the ground from different divisions/departments working together.
Next meeting will be in January.