In The News › Economic development leaders warn against state budget cuts

May 24, 2011

Source: The Newsroom, CityBusiness

Filed under: Economic Development

Economic development leaders warn against state budget cuts

Tuesday, May 24, 2011
By Ben Myers
The Newsroom, CityBusiness

Rod Miller and Michael Hecht are following Stephen Moret’s lead in slamming House Bill 1, the proposed state budget bill for fiscal 2011 that would slash money dedicated to bringing major corporations to Louisiana.

Let’s back up for a second. Miller and Hecht lead the NOLA Business Alliance and Greater New Orleans, Inc., respectively, and Stephen Moret is the state’s secretary of economic development. Here’s another way to look at it: Miller, Hecht and Moret are forming a three-headed monster representing New Orleans, the 10-parish metropolitan region and the entire state in speaking out against the bill.

Since Miller took his job earlier this year, he has faced questions about what differentiates the NOLA Business Alliance from all the other entities focused on economic development. These include various chambers of commerce and incentive-granting bodies such as the Industrial Development Board, and the questions about roles are usually followed by more fundamental, well-worn questions about these entities’ traditionally uncoordinated efforts.

The larger question about the effectiveness of the entire ecosystem will be around for awhile. But Hecht and Miller are getting their message down while positioning themselves as point men for specific geographies. Hecht successfully tried out a metaphorical line on an audience gathered this morning at the Chateau Bourbon for an event hosted by the Bureau of Governmental Research.

Prior to the NOLA Business Alliance, economic development on the New Orleans-regional-state continuum was a “doughnut” approach, Hecht said. The outer and middle rings – i.e. state and regional entities – worked together, but there was a big hole in the middle. In other words, nobody was speaking for New Orleans specifically. Now, Hecht said, there’s a warm, tasty substance called the New Orleans Business Alliance.

So now we’re more like – wait for it – a beignet. The audience found this clever.

It’s hard to know what an economic development beignet actually tastes like until it’s fully baked, if you get my drift, and it won’t come out of the over for about a year – at least that’s the time Miller said he needs to show measurable results.

Back to House Bill 1. Almost $82 million is at stake. Miller and Hecht told reporters after the BGR event that this money is for “contingency” costs, such as moving equipment, and it could make the difference when corporations decide whether or not to come here.

What’s really at stake? There are three layers of assertions thanks to the three-headed monster, through press releases and interviews: 14 projects statewide, four to five regionally, with two to three in New Orleans. These projects are variously described as on the verge of happening and directly jeopardized the by cuts in the proposed budget, although there’s no way to know without any specifics about the companies themselves. No money from the fund has actually been committed, Hecht and Miller said.

More than the specific projects, Hecht seemed concerned about Louisiana gaining a reputation as a state that “doesn’t keep its word.”

At some point, Hecht said, fundamental conditions in the state would obviate the need for things like mega-project funds. He paused when asked how to determine when it’s time to scale back. There are measurables, he said, such as companies per capita and jobs per capita, but added that “it’s largely perception.”

“Once we get the critical mass of companies and people here – so we become like a Montreal or an Austin – that incentive might be less important,” he said, referring to the digital media tax credit. “But the fact that it is permanent is a critical part of the sell, there’s certainty in it.”

Executives hate uncertainty, he said.

But how will we know when we’re Austin?

May 24, 2011

Source: The Newsroom, CityBusiness

Filed under: Economic Development

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