Executive Office Of Commerce Won't Help RI Economy--Critics

Executive Office Of Commerce Won't Help RI Economy--Critics

A bill to create an Executive Office of Commerce was heavily criticized by several experts as having no merit where it comes to improving the state’s economy. “The creation of an Executive Office of Commerce in 2013 will have no impact on the state's ability to retain and attract business or create jobs,” said Dr. Edward Mazze, Distinguished University Professor of Business Administration at URI. 

Sponsored by the Chairman of the House Finance Committee, Helio Melo (D – East Providence), the bill seeks to aid Rhode Island’s economic development by creating an Executive Office of Commerce to oversee the functions of several state departments. Furthermore, it creates the position of Secretary of Commerce to be appointed by the Governor. The proposed legislation, H - 6063 sub-A, passed consideration by House finance with unanimous approval last week.

“It will do nothing but change the reporting relationships between state agencies," said Mazze."The legislation is a ‘knee jerk’ reaction to 38 Studios and other loans and activities of the Economic Development Corporation. The legislation is not supported by the Governor who is responsible for the appointment. There is no budget to support the office. How can this work if the Governor is opposed to the legislation? An important point that is being ignored by the legislature.”

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Progressive Democrats: "A bureaucratic reshuffle"

Sam Bell, State Coordinator of the Rhode Island Progressive Democrats of America said, “When RIPEC, Rhode Island's top corporate lobby, proposals a bureaucratic reshuffle to give more power to big business interests, there's nothing hidden about the agenda. It's quite blatant.” Bell criticized the legislation, saying, “This bureaucratic power grab has nothing to do with improving our ridiculous business administration policies. It is only an improvement if it is saner forces that gain more power, which certainly does not appear to be the case here.”

The language of the bill creates an office headed by a new position of Commerce Secretary to be appointed by the Governor. The bill describes its purpose as “…to develop an integrated system of economic development activities while preserving and protecting the safety and quality of life for the citizens of Rhode Island and to promote the economic viability of the Rhode Island economy … .” It goes on to state its mandate as “… to serve as the principal agency of the executive branch of government for managing the promotion of commerce and the economy within the state and shall have the following powers and duties in accordance with the following schedule:

On or about February 1, 2014, to operate functions from the Department of Business Regulation;

• No later that April 1, 2014, to operate functions from Department of Labor and Training;
• No later than July 1, 2014, to coordinate in conjunction with the director of the Department of Environmental Management, the business permit processes in order to expedite the issuance of said processes;
• No later than October 1, 2014, to operate various divisions and functions from the Department of Ddministration;
• No later than February 1, 2015, to coordinate, in conjunction with the Coastal Resource Management Council (CRMC), the business permit process of the council in order to expedite the issuance of said permits.

 

"More power to the corporate lobby"

“The original goal of this legislation, a gutting of the Department of Environmental Management, has been somewhat watered down in the amended version of the bill," said Sam Bell. "But the fact remains that this bill would substantially increase the political power of big business in our state. These interests have been running Rhode Island's economic policy for the past decade, and the results have been nothing short of disastrous. The budget crisis created by the tax cuts for the rich forced massive increases in commercial property taxes and mild increases in sales taxes, crushing small businesses and padding the pockets of the wealthiest Rhode Islanders. Granting more power to the corporate lobby that pushes these failed policies is unwise, to say the least.”

Dr. Mazze summed up, in his opinion, the shortcomings of the proposed legislation by saying, “Rhode Island will be a slow growing economy until the Governor and the legislature work together to make the state more business friendly and competitive with other states in taxation and education. The business community must play a role beyond 'studying' the issues and take some responsibility for business development in the state."

Could it fix EDC or no?

Mazze said that the labor and education communities must also be part of the economic development team. "The creation of the Secretary's position does nothing to change this situation," he said. "EDC has been in trouble for over a decade because professionals have not run the agency and the agency is a 'parking spot' for individuals with little economic development experience. EDC can be rebuilt. But it must be rebuilt by a Governor with support by all the important stakeholder groups.”

Bell gave his own commentary on the role this bill could play in changing the power structure of the EDC: “By strengthening the big business interests that control the EDC, this reshuffle would likely reduce oversight of our shameful 'economic development' agency,” he said.

The bill, in its current form, is scheduled for debate by legislators on Tuesday, June 4th on the floor of the House.