Private businesses would play a significant role in handing out publicly funded economic development grants and loans under a plan Gov. John Carney’s (D) constructing.
Companies would pay to join a public-private partnership called the Delaware Prosperity Partnership that could eventually oversee millions of dollars of taxpayer money.
Carney says the current set-up, which is purely state-run, isn’t wrong, but that it needs to be retooled for a significantly changed and constantly shifting economy.
“Our economy is much more of an innovation, kind of start-up, entrepreneurial economy and we’ve got to respond on the government side. I’m not sure we have as well as we could have,” he said.
Carney notes the group will continue to focus on attracting big businesses, which have led to big flops in the past and the loss of tens of millions of dollars in state cash, like the bankruptcy of Fisker Automotive.
But it will also target startups and medium size companies with high growth potential, according to the report.
Right now, the state-run Delaware Economic Development Office oversees such matters through the Strategic Fund, which lawmakers have historically funded in the area of $10 million per year. Some or all of its power could eventually be turned over to the partnership under the recommendations, but it would initially co-exist with the new group.
As proposed, the 15-member board would be made up of CEOs, small business owners, union heads, universities and nonprofits.
Rod Ward, the CEO of CSC and co-chair of the group that wrote the report, says the size of the group will safeguard against any one member steering it for private gain.
“We’re looking for something that creates a vibrant economic landscape in terms of the whole, all of Delaware becoming more vibrant. That’s for entrepreneurs, that’s for small businesses and that’s for large companies,” Ward said.
There would be two other levels of membership. Each tier would cost money to join, with board members paying the most.
The report expects such membership fees to add up to about $1 million, with Delaware taxpayers kicking in $1.5 million to help cover operating costs.
None of the employees hired would be considered state workers.
Ward also rejects the idea that only the wealthiest of companies will have actual influence, but it’s not clear whether members of lesser tiers would have voting power or the ability to direct any kind of committee process.
The governor and state lawmakers would appoint nine members of the board, with six others from the private sector.
Carney hopes to sign the new changes into law in the coming months with the group operating by early next year.
Correction: A former version of this article said the new public-private partnership would eventually have control over millions of dollars allocated to the Strategic Fund. It has been corrected to show that oversight of the fund would only be transferred to the group if approved by the state.