This is interesting timing, to say the least.
Just as GLI begins a search for a new CEO, Louisville Metro Council President Jim King is telling local Democrats it’s likely city government could cut GLI’s funding in favor of the city’s economic development department.
Multiple sources told Insider Louisville King discussed the move at a January meeting of the Metro Democratic Club, telling members the city was likely to cut all funding to GLI.
“(King) said, ‘Let the chamber be the chamber,’ ” said one Democratic Party insider.
But some business leaders close to Mayor Greg Fischer question the idea, saying an independent chamber/economic development effort is more effective than one integrated into government.
In an interview Tuesday, King acknowledged the remarks. But he stressed he was speaking as 10th District metro councilman and council president, and this is his position, and not necessarily Fischer’s.
“He has his own opinion, I’m sure,” King said, adding the additions of Margaret Handmaker, Ted Smith and others to the city’s economic development effort make it likely to become the dominant job-creation entity.
King acknowledged cutting off city funds would ultimately leave GLI as simply a chamber of commerce, with its traditional business networking and lobbying role.
“But it wouldn’t be cold turkey,” King said. “It would be phased in.”
The city could cut 50 percent of current funding for 2013, 25 percent of current totals by 2014, and finally to zero by 2015 under King’s plan.
King said the cuts aren’t a criticism of GLI under departing CEO Joe Reagan, who’s leaving January 26 to become CEO of St. Louis Regional Chamber & Growth Association.
“Joe and GLI have had excellent contacts with Ford and other companies, and we valued that. On the other hand, the city is building its own economic development department,” he said.
Can the city afford two efforts at a time of budget cutting? King added.
Carmen Hickerson, GLI’s vice president of public affairs and communications, declined to comment until GLI officials get more details.
Fischer spokesman Chris Poynter stated in an email that “reducing GLI funding is one of a large number of cuts King and Metro Council are recommending to the Mayor.”
Those cuts include defunding Louisville Downtown Development Corp., Poynter wrote. LDDC is a quasi-governmental agency that oversees strategic downtown planning and promotes retail development, though it doesn’t have a budget to fund projects.
Louisville-Jefferson County Metro Government gives Greater Louisville Inc., the Metro Chamber of Commerce, $1 million annually, about 33 percent of its total budget. GLI has been criticized over the last year for its high salaries and meager success in attracting big employers and new jobs to Louisville.
Louisville lost about 35,000 jobs between 2000 and 2010, according to the Bureau of Labor Statistics.
Departing CEO Reagan was paid at least $369,000 in 2009 base pay, though his salary was cut substantially in 2010. But insiders say his pay was augmented by a special fund from local business leaders including Bill Samuels, Jr., retired CEO of Maker’s Mark distillery.
Earlier this month, Fischer appointed Smith as director of the newly created Department of Economic Growth & Innovation, according to the Courier-Journal.
Handmaker is director of Louisville’s Bloomberg Innovation Delivery Teams, overseeing a three-year effort, funded by Bloomberg Philanthropies, to improve city services and expand jobs in advanced auto manufacturing. Bloomberg Philanthropies – created by New York City Mayor Michael Bloomberg, who founded the Bloomberg financial news conglomerate – awarded Louisville a $4.8 million grant back in July.
At the same time Fischer announced changes in the city’s economic development department, he warned of a looming $12 million city budget shortfall.
But Doug Cobb, former GLI CEO and a member of Fischer’s 2011 post-election transition team, warns against cutting GLI funds and ending its history as a combined chamber/economic development entity functioning independent of government.
“My opinion is that this would be a mistake,” Cobb wrote in an email response to a query. “There are aspects of the work of economic development that are much better done outside of government. While it might make sense to move some things back in to the government, in general and over time, a public-private partnership is the better way to do this kind of work.
“I’ve yet to see anyone make the argument that government can do the work better.”