Last Thursday the Herald-Leader reported on the new draft report from the cut-and-paste consultants at Angelou Economics.
In their disgraced report, one of Angelou’s few original recommendations was to expand the reach and power of Commerce Lexington. After ProgressLex outed Angelou’s bunk report and Angelou and Commerce Lexington came under increased scrutiny, Angelou went back and added into this new draft some language reccomending that the Mayor of Lexington be in charge of the city’s economics. (A radical thought.)
Bob Quick, head of Commerce Lexington, praised the new report as “aggressive” and “forward-looking.” And then he implied that to carry the report out, the city would have to give Commerce Lexington more money.
And there was also this:
AngelouEconomics also provided a draft assessment of Commerce Lexington’s performance compared with peer cities.
Commerce Lexington’s economic development budget of $1.2 million is below the median $1.7 million of a benchmark group that includes Asheville, N.C.; Louisville; Northern Kentucky; Austin, Texas; and Colorado Springs, Colo.
According to Angelou Economics, “Commerce Lexington’s 41 percent public funding is the third-highest of the benchmarked regions,” but the number of private investors is the second-lowest, at 125.
Hmm… 41% public funding.
With the city facing a $25 Million budget shortfall, Mayor Gray — who on Tuesday will deliver his budget address — is likely to demand greater accountability from outside agencies working with LFUCG and funded by LFUCG.
The role of Commerce Lexington — which has received $2.6 million in taxpayer money for economic development in the last five years — is about to change.
In recent years, the local chamber of commerce organization has guided local economic development efforts as the city took a largely hands-off approach. Commerce Lexington, which says its role is to market Lexington to businesses, provides limited public information about what it does with that city money.
The leaders of Commerce Lexington have good reason to resist calls for transparency from the Herald-Leader given the paper’s recent history of exposing wasteful spending at the Airport, the League of Cities and other publicly funded organizations… so when the paper (Ms. Janet Patton leading the charge) tried to dig deeper into Commerce Lexington’s finances… well:
It is less than clear, from documents recently obtained by the Herald-Leader, exactly what the city gets for its Commerce Lexington investment, which grew from $50,000 a few years ago to more than 10 times that under former Mayor Jim Newberry.
Commerce Lexington maintains that because less than 25 percent of its overall budget comes from public money, it is not subject to open-records laws. The group declined to make additional documents public or to disclose how thousands of dollars in travel money is spent.
As we discussed here last month, Commerce Lexington’s most recent available IRS 990 Form provides some insight into the group’s finances and a stroll through their website paints a nice picture of their private sector funders (you know, local small businesses like Wal-Mart and JP Morgan Chase).
This publicly funded private group of big businesses parading as protectors of small business works actively to lobby government (local, state and federal) to dismantle collective bargaining and other union protections, to break down federal regulations on the coal industry, and to stifle any progress toward real health care reform.
So now Commerce Lexington is unhappy because Mayor Gray is likely to cut the taxpayer funding they are so dependent upon. Gray is likely to backseat Commerce Lexington’s role in the city’s economy… which is huge since under Mayor Newberry, the role of economic development was almost entirely outsourced from city government to Commerce Lexington.
Let’s look back at Mayor Newberry’s innaugural budget. Upon being elected (perhaps as a thank you to his good ol’ boy network), Newberry vastly expanded the role of Commerce Lexington in city planning:
I want to emphasize a few steps designed to enhance our economic development efforts:Commerce Lexington
First, LFUCG has entered into a services agreement with Commerce Lexington in the amount of $661,500 – a 631% increase over last year’s adopted budget. Through this agreement, we will fund most of our business recruiting efforts.
Or, put another way:
It’s not clear how much that funding will be slashed under Gray or what steps, exactly, he will take, aside from telling the paper that he expects to be much more involved in the economic decision making of the city than, say, the previous laissez faire Mayor (aka, he who excused the airport and KLC funding frauds).
What is clear is that some of the most powerful members of the City Council are taking a vocal stand against the usual Commerce Lexington blank check — including Vice Mayor Gorton, At-Large Kay and the one guy you really don’t want on your ass, the Council Bulldog Mr. Julian Beard.
Not all council members are upset… cue up an F-Bomb of surprise because…
But council member Doug Martin said reducing economic development spending is not the answer.
“I’m a supporter of the public-private partnership,” Martin said. “I think it’s not whether we need to cut it; it’s whether we need to quadruple it.”
No F-ing Way! Doug Martin wants to give them more F-ing money! Get the F out of here!
No… seriously, get the F out of here and go read Ms. Patton’s full Sunday report on Commerce Lexington’s dire straits if you haven’t already. Nothing will tear at your heartstrings this morning more than yet another protector of big business interests whining and complaining about losing taxpayer dollars.
Hmm… Dire Straits. Money for nothing. That ain’t working.
[You can explore some of Angelou's findings, reports and data here.]