NCInnovation is a good idea, but NC Senate's funding scheme is misguided
Published July 20, 2023
Capitol Broadcasting Company is a contributor to NCInnovation and supports its success but is concerned about the financial scheme in the current Senate budget bill.
It is hard to imagine what North Carolina’s Senate legislative leaders were thinking – if that process was even engaged – when they surreptitiously inserted a provision in the state budget bill to create and give $1.4 billion in FOREVER MONEY to a private company essentially run by the legislature.
Regardless of the laudable plans and goals of the embryonic private non-profit NCInnovation – fostering and supporting economic growth, particularly in rural areas, by tapping the expertise of several of the state’s public universities to transform ideas and innovations into jobs -- that is essentially the scheme inserted into the state budget the Senate passed in May.
Taxpayers are giving a whopping $1.425 billion to endow the private organization – basically giving it a permanent source of revenue without any accountability. This “private” company would be government created, funded and effectively run by the House Speaker and the Senate President ProTem – since they’d appoint eight of the 13 board members who oversee operations. The private company will, by its private corporation bylaws, select the remaining directors.
What business is it of the taxpayers to endow with a permanent source of funding a private company? There’s nothing like it in the state. The only thing even remotely close might be the Golden Leaf Foundation – but it was established as part of a 1998 multi-state settlement with cigarette makers. The money came from the private sector NOT the taxpayers. Further, the mission of the Golden Leaf Foundation is to take funds from its endowment and directly assist the state’s economically distressed, tobacco-dependent communities. Members of the foundation’s 15-member board are appointed equally the governor, the state Senate leader and the state House speaker.
The legislation to send $1.4 billion into a private company with little incentive for success, accountability or oversight. It is specifically exempt from the state’s open records and open meetings laws. While it is required to file annual reports to the General Assembly that outline the kinds of information to be included, there objectives to push for success and there are no required metrics on which to judge what NCInnovation is achieving with the state taxpayer funds received.
Working with communities and university campuses to foster innovation and look for ways to apply it to job creation – particularly in rural parts of North Carolina – is an important and laudable effort.
This is an unworkable funding plan with an uncharted path that lacks the accountability that must come, particularly with the use of taxpayer dollars.
The NCInnovation efforts toward job creation and economic development are worthy of further examination for appropriate implementation.
The governor should appoint members of the organization’s board, along with the legislative leaders. It should include an equal number of appointments by each the governor and legislative leaders. The board should also include the state’s Commerce Secretary as, at least, an ex-officio member.
After all, it is the state’s Secretary of Commerce – appointed by the governor to serve in the executive branch – who oversees economic development. Additionally, funding should be on an annual basis, recurring for no more than three years. It should be subject to, NOT exempt from, the state’s public records and open meetings laws.
There needs to be a thorough examination of its plans. Proposals for funding must both hold it accountable for how the money is used as well as detailing measurable objectives to determine what is accomplished with those resources. All that backed up with clear publicly available disclosures, measures of performance and accountability.
This is a proposed program with great potential for important economic development success. We hope – and urge the legislature – to get back to the drawing board and produce an implementation process that enables fulfillment of that potential.
NOTE: Capitol Broadcasting Company is a contributor to NCInnovation.