Fox against delay on Commerce

Gov. Lincoln D. Chafee didn’t love the idea of a new state executive office of commerce when it was first proposed in the wake of 38 Studios’ collapse in 2012.
Since state lawmakers enshrined the office in a set of economic-development reforms last summer, Chafee’s ambivalence about it has only appeared to grow. Now in his last state budget before leaving office, Chafee proposes pushing creation of the office back another six months – from February 1, 2015 to July 1, 2015.
At a recent meeting of the R.I. Commerce Corporation – the renamed agency that carries out state economic policy and would be folded into the new cabinet-level office – Chafee said the intent of delaying the change is to give his successor more time to plan for it.
“It’s just a realization, having been through it as a new governor, of all the responsibilities: having to put together a budget, put together a cabinet and get them confirmed,” said Chafee, who is not seeking re-election. “It is all happening in a short time frame, and I thought this would allow some breathing room while this complicated reorganization takes place.”
But along with buying more time for the next governor, Chafee acknowledges a desire to see the state’s economic-development system become a campaign issue in the upcoming election, which may then open a path to reversing the creation of a new office altogether.
“I always believe some of these decisions should get hashed out in the campaign process,” Chafee said. “Candidates get asked what they think and they should be held accountable for how they feel. If the voters agree with that position and that person gets elected, than they should have the opportunity to carry through with that.”
Campaign or no, there’s little indication General Assembly leaders, especially House Speaker Gordon D. Fox, D-Providence, are interested in delaying what many consider the most substantial policy response to the political and fiscal disaster of the 38 Studios loan guarantee.
In a statement emailed through spokesman Larry Berman, Fox pointed out that the start date for the Executive Office of Commerce had already been pushed back, from the first of this year to next February, at the request of the governor.
“The original House legislation … had an earlier effective date,” Fox said in the statement. “The legislation that was enacted with the 2015 date was already the result of a collaborative effort with the Senate and Gov. Chafee that was agreed upon by all parties. At this time, I am not inclined to make additional changes to the legislation.” Senate leadership was less enthusiastic about the executive office from the outset – it wasn’t included in that chamber’s initial package of economic- development reforms – but hasn’t made any move to delay it.
Senate President M. Teresa Paiva Weed, D-Newport, did not immediately respond to requests for comment on Chafee’s proposal.
In many ways Chafee’s resistance to creating a new economic office reflects his newfound satisfaction with the existing Commerce Corporation, after he reorganized it post-38 Studios.
Before the General Assembly passed its reforms, Chafee had commissioned a full agency reorganization, changed eight of 12 members of the then-Economic Development Corporation board of directors and replaced the agency’s executive director, who he had never been particularly comfortable with.
Since those changes, Chafee has referred to the new rules approved by lawmakers last year as a bureaucratic “spider web,” but his administration has worked through them.
Most of those changes went into effect at the start of this year, including changing the name of the old EDC to the Commerce Corporation, posting a raft of documents (from the executive director’s job description to an organizational flow chart) online, creating a customer-centric “business-development center” within the agency to respond to company requests and writing a strategic state economic plan.
The law also required the formation of four new advisory councils to work on economic-development issues on top of the existing Commerce Corporation board of directors.
So far only one of those new groups has been created, the nine-member Made in Rhode Island Manufacturing Collaborative, which has met three times to discuss issues centered around what should qualify for the “Made in Rhode Island” label.
The Council on Economic Advisors, a nine-member team with five economics experts, was supposed to be named by the first of the year, but the governor’s office has yet to put it together. “We need to make appointments to the Council of Economic Advisors,” was the email response from Chafee spokeswoman Faye Zuckerman on what was holding the formation of the council up and when it might happen.
A separate Economic Development Planning Council to generate the strategic plan has been superseded by the ongoing RhodeMap RI planning process. And there is no sign yet of the 15-member Human Resource Investment Council, which appears to be tied to the creation of the executive office of commerce.
Commerce Corporation Executive Director Marcel Valois points out that the corporation itself has gone beyond the changes required by the 2013 law, especially the “concierge-level” business-development center, which has been supplemented by a new digital Client Relationship Management system for tracking calls and requests.
“We have embraced the direction the General Assembly has given us,” Valois said.
The creation of a new executive office headed by a secretary of commerce was proposed by the business-backed Rhode Island Public Expenditure Council to better align economic-development operations with policy objectives. The proposal came in a review of the state’s economic-development system commissioned by Chafee.
In addition to taking over oversight of the quasi-state Commerce Corporation, the new executive office is slated to operate the R.I. Department of Business Regulation, R.I. Office of Housing and Community Development and R.I. Office of Regulatory Reform.
By September 2015, the law also calls on the state to complete a study of moving additional government functions, including those in the R.I. Department of Labor and Training and R.I. Department of Environmental Management, inside the Executive Office of Commerce.
On top of delaying the creation of the Executive Office of Commerce, Chafee’s budget would also keep the Office of Regulatory Reform in its current place within the Office of Management and Budget.
“It has been working well,” Chafee said about the current regulatory-reform efforts. “We have a good team there at [the Office of Management and Budget.] “The oversight and the conversations that were going on in that office seemed to have meshed with regulatory reform.” •

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