Updated July 29 at 5:44pm

Dismantling EDC again on the table

By Patrick Anderson
PBN Staff Writer

In the wake of the 38 Studios bankruptcy last spring, Gov. Lincoln D. Chafee said he would study consolidating the state’s economic-development arm within the executive branch to prevent a similar debacle from happening again.

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ECONOMIC DEVELOPMENT

Dismantling EDC again on the table

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In the wake of the 38 Studios bankruptcy last spring, Gov. Lincoln D. Chafee said he would study consolidating the state’s economic-development arm within the executive branch to prevent a similar debacle from happening again.

When the analysis he commissioned from the Rhode Island Public Expenditure Council backed the idea, suggesting a new commerce secretary handle all business-related policy, Chafee passed on it. He decided instead to reform the R.I. Economic Development Corporation from the inside.

Now Chafee is faced with potentially having to open a new executive office of commerce whether he wants to or not.

In a wave of 18 economic-policy bills filed this spring, many modeled directly on RIPEC recommendations, House Speaker Gordon D. Fox has proposed dismantling the EDC and replacing it with a more-limited R.I. Commerce Corporation controlled by the commerce secretary.

The House plan goes even further than a Senate package – which also mandates statewide economic planning, greater coordination between state regulatory agencies, and a rebranded EDC – but would not stop short of forming a new secretariat.

Since RIPEC released its EDC recommendations last year, the loudest criticisms have been about adding another layer of bureaucracy and putting independent departments, especially the R.I. Department of Environmental Management, under control of a business-centered agency. In addition to DEM, the RIPEC plan would have placed the R.I. Department of Business Regulation and R.I. Department of Labor and Training under the commerce secretary.

To navigate the environmental issue, Fox’s plan avoids placing whole departments within the newly formed commerce office.

Instead, his bill calls for the commerce office to only “operate various divisions and functions” of those departments. Exactly which functions those would be aren’t specified.

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