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Good Jobs First: Public-Private Power Grab: The Risks in Privatizing State Economic Development Agencies

While some states have turned to public-private partnerships (PPPs) to revitalize their economic development agencies, Good Jobs First finds that these arrangements often present more problems than solutions.

1/25/2010
While some states have experimented with public-private partnerships (PPPs) in their economic development agencies, Good Jobs First, a national policy resource center, says these arrangements are often a poor option.

Seven states currently utilize PPPs: Florida, Indiana, Michigan, Rhode Island, Utah, Virginia, and Wyoming. Several other states have used PPPs in the past but have since abandoned them. But problems have frequently resulted under these arrangements. Some of these conflicts have included:

• Misuse of taxpayer funds (Rhode Island, Florida, Wyoming)
• Inflated executive bonuses (Virginia, Florida, Michigan, Wyoming)
• Questionable subsidy awards by PPP subset with a role in the process (Michigan, Rhode Island)
• Conflicts of interest when awarding subsidies (Florida, Utah, Texas)
• Questionable claims about PPPs' effectiveness (Wyoming, Florida, Utah, Indiana)
• Resistance to accountability (Florida, Michigan)

Despite the potential problems, states will likely continue to pursue PPPs. Good Jobs First also presents a due diligence checklist for implementing these partnerships.

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