Getting ‘facts straight’ on Rural Economic Development Center

June 20, 2013

We are deeply disturbed about articles this weekend in The News and Observer that have painted a partial and inaccurate picture of the N.C. Rural Economic Development Center and its work on behalf of rural communities in North Carolina. The articles focus on two rural job-generating grant programs – the Economic Infrastructure Program that supports water, sewer and other “backbone” infrastructure; and the Building Reuse and Restoration Grants Program that restores vacant buildings to productive business use.

We share the following points in hope of getting the facts straight.

Fact 1: Most rural leaders are aware of the Rural Center’s broad programming and results. Other N&O readers may not be. The center has led public policy initiatives, trained local leaders and in other ways helped build the capacity of our communities to answer their challenges. It has awarded 5,000 grants totaling over $680 million since 1987. Nearly two-thirds of this funding has helped communities solve serious health and environmental issues through water and sewer improvements. The articles focus on a subset of grants that provide incentives for job creation.

Fact 2: The General Assembly first appropriated funds to the Rural Center for job-generating programs in 2004, following the massive loss of rural jobs resulting from the 2001 recession. The center modeled its programs on existing state programs, both in terms of repayment, or clawback, provisions and reporting procedures. The North Carolina model meets accountability standards set by Good Jobs First, a national watchdog group that takes a cautious view of incentives.

Fact 3: Three out of every four grant dollars from the Economic Infrastructure and Building Reuse programs have supported private sector jobs in manufacturing, processing and health care – jobs that provide competitive wages and benefits. The N&O articles focus on restaurants and retail projects, which account for only 12 percent of funding. The restaurant and retail projects are often located in economically distressed counties where options are severely limited. These businesses keep local dollars in the community and increase the property tax base.

Fact 4: The Rural Center does not seek to dictate to rural North Carolinians what they should and should not choose for economic development. Projects are developed by community leaders; approved by town councils and county boards of commissioners; and submitted by units of local government. Both programs require that local governments match Rural Center grants dollar for dollar with other funds. The Rural Center has never “built” a Walmart or any other business.

Fact 5: By focusing on a handful of projects, the articles leave the mistaken impression that job numbers have fallen short in the programs. The fact is that of 274 grant projects that have been fully completed, 30 percent more jobs were created than required under the terms of the grant contracts. In absolute numbers, the applications projected the creation of 9,900 jobs. The businesses created 13,144 jobs.

Fact 6: With incentive grants, job counts must be constantly revised and are based upon 1) job numbers guaranteed by performance agreements; 2) actual job numbers reported in required reports; and 3) final job numbers at the time the project is closed out. Job numbers do change, but get increasingly more accurate as the project matures.

Fact 7: In a perfect world, our small towns would be filled with thriving, homegrown and locally owned businesses. But in the real world, rural communities often view chain stores and restaurants as highly desirable for the jobs, services and products they bring. And if towns choose to entice the “big box” stores, they must raise funds to build 100 percent of the public infrastructure required. Otherwise, the businesses will go elsewhere.

Fact 8: “Spending in the shadows.” It’s a poetic title, but we’re mystified as to its use in the N&O articles. In truth, the center conducts extensive outreach to ensure communities are aware of grant opportunities; ensures staff are available to answer community questions; and conducts rigid scoring reviews. Projects then move to board advisory committees for in-depth reviews and then to the board’s executive committee for final review and decision-making. Once decisions are made, the center announces the grants and posts projects on its website. Furthermore, the center makes a full report to the General Assembly on all grants.

We have the utmost confidence in the integrity of the Rural Center’s economic development initiatives and welcome any questions about the center’s grant-making processes.