Redevelopment Funds

As many states, ours is one, debate the future of redevelopment funds which have driven some urban development for several years, it is worthwhile to consider, as this article from the Wall Street Journal does, allowing the effort to become a nonprofit enterprise.

An excerpt.

“Some cash-strapped states have identified another job they want to shift to the private sector: economic development.

“A number of governors are working to turn their development offices into some form of nonprofit private entity, a move that would transfer the task of giving out state grants, tax breaks and other economic incentives from the hands of government.

“The idea, which has as much to do with economic philosophies as with saving money, is mainly gaining ground in states with Republican governors, including Ohio, Wisconsin, Iowa and Arizona.

"It's a matter of greater flexibility and the ability to act more like a chamber [of commerce] rather than a state agency," said Wisconsin's new Republican governor Scott Walker, adding that private groups are better equipped to create jobs and attract companies.

“As tax revenue has shriveled in recent years, cities and states have moved to privatize various operations, such as state-run liquor stores, local libraries and parking meters.

“Seven states, including Michigan and Florida, already have some form of private group filling the economic-development role. Critics say handing this power to a private entity can create conflicts of interest, because the nonprofits usually have boards made up of public officials and private business leaders. This can create conflicts as these boards help steer tax breaks and incentives.

“Also, in many cases private economic-development agencies aren't subject to the same standards for public disclosure as government agencies, even though they receive government money. In Ohio, where newly elected Gov. John Kasich has proposed dissolving the state's Department of Development and creating an entity called JobsOhio, lawmakers have pushed to increase disclosures and allow the state's inspector general to investigate the proposed entity.

“Advocates say it makes sense to separate the task of creating jobs from large government agencies that often have a broader mission. In Wisconsin, the current Department of Commerce has responsibility for regulation as well as economic development. Among the 400 employees in Ohio's Department of Development, 60 are focused on economic development; the balance handle areas including homeless programs, community development and home energy assistance.”