Now, onward

July 18, 2013 

A two-part series in The News & Observer last month raised some serious questions about the running of the N.C. Rural Economic Development Center, created more than 25 years ago to spur economic growth in depressed parts of rural North Carolina typically left behind when it came to economic recruitment.

In that time, the center has had some successes in getting water and sewer – and the business development that results – to rural areas and in investing in seed money to build businesses and jobs. It has spent many, many of millions of dollars in the process.

But the series found that some of the center’s numbers on new jobs created were inaccurate, that a lot of the jobs were minimum wage at big-box retail stores and that politicians, with whom center President Billy Ray Hall was adept at maintaining friendly relations, influenced some grant decisions.

The report also noted that Hall was handsomely compensated and that his board apparently authorized contributions to a special severance account above and beyond his retirement plan. That fund reached over $240,000.

Damaging audit

State Auditor Beth Wood provided the broom to sweep Hall out the door with a stinging audit in which she found Hall’s salary of $221,000 to be “unreasonable.” She also questioned the six-figure compensation of some vice presidents. Wood’s conclusion was that Hall’s group was “not overseeing our tax dollars as well as it should be.”

Republican Gov. Pat McCrory and legislative leaders wanted Hall to go, and without many defenders in positions of influence (he was well-connected to Democrats), he did go Thursday morning. One hopes he will not be allowed to take the ridiculous severance package with him.

Now serious questions linger: What will become of the center? Will Republicans in charge on Jones Street endorse the idea of a special group to spur rural economic development? It’s a tough but important task as the state becomes more urbanized and with new, high-tech businesses typically wanting access to good airports and larger cities for neighbors.

Fine-tune the center

Lawmakers shouldn’t make any rash decisions about the center’s mission. Yes, Hall should have resigned, and it may be that others in leadership positions should be replaced as well. Perhaps the mission should be fine-tuned or redefined. Republicans can shape this effort any way they like, but killing it is not necessarily the way to go.

There are places in rural North Carolina that have businesses they didn’t have a few years ago because of the center. Yes, some of those businesses aren’t high paying, but consider that in a small outpost far from cities, even a fast-food restaurant that employs 20 people is welcome and a boost to the area.

Billy Ray Hall believed in his mission. He did some good work, and some of the state’s most accomplished leaders supported his efforts. But what happened at the center is a reminder that agencies of all kinds, with different goals and responsibilities, must always manage public resources with a magnifying glass and do so conservatively.

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