Will a Revamped EDC Turn Rhode Island Around?
Wednesday, September 26, 2012
The Rhode Island Economic Development Corporation (EDC) should be renamed and should take a more “customer-centric” approach to stimulating the state’s economy, according to recommendations made in a 140-page report released Tuesday.
The report, commissioned by the Rhode Island Public Expenditure Counsel (RIPEC) suggested the current EDC lacks a vision and suggested restructuring the quasi-public agency so it is controlled by state government.
Under the proposal, the EDC would become the Rhode Island Commerce Corporation and a cabinet-level Secretary of Commerce would be appointed to oversee the operations. A new nine member council, which would include four employees from state offices and five appointees by the Governor, would also be created to advise the agency.
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RIPEC’s report came at the request of Governor Lincoln Chafee in the wake of the failed 38 Studios deal, which involved the state giving a $75 million loan guarantee to former Red Sox pitcher Curt Schilling to bring his company to Rhode Island. The company filed for bankruptcy less than two years after the EDC made the deal.
“38 Studios was and remains an economic development crisis for the State of Rhode Island,” Chafee said. “But it is indicative of the broader challenges that have plagued our state’s approach to creating a fruitful business climate conducive to job creation. With that in mind, and to ensure that we never encounter a 38 Studios situation again, I asked RIPEC to take a thorough look at the RIEDC, particularly its distribution of loans, and make recommendations for a better path.”
RIPEC Executive Director John Simmons recommended the state develop a legislative packet that would include information about the cost of doing business in Rhode Island and tax policy changes. He also suggested the state create a committee to construct a statewide economic plan.
“I want to thank John Simmons and the entire RIPEC staff for the hard work they have done over the past several months,” Chafee said. “I appreciate it and I know the people of Rhode Island join me in that appreciation. This is a substantial report. Its recommendations are neither simple nor easy – nor should they be. I will continue to digest the report over the coming weeks as my Administration works to put in place the best structure for sustained and long-term business growth in Rhode Island. We need to make sure that the next incarnation of the RIEDC cannot make a similar mistake.”
While it is unclear whether the General Assembly will support the RIPEC recommendations, Senate President M. Teresa Paiva Weed said there “is no higher priority for the Senate than our state’s economy.”
“I look forward to working together with all parties to create a plan and embrace a clear vision that will place Rhode Island on a path to a strong and vibrant economy,” she said.
State Senator Paul Fogarty, chairman of the Labor Committee, said it is clear changes to the way the state handles economic development need to be considered.
“Rhode Island doesn’t have unlimited resources at our disposal, and we have one of the highest unemployment rates in the country,” he said. “We need to make sure we’re using the most effective economic development models and that we’re getting the biggest bang for every buck we’re spending on the effort.”
Dan McGowan can be reached at [email protected]. Follow him on Twitter: @danmcgowan.
