Brewer on April 14 announced plans to scrap the entire department and replace it with the Arizona Commerce Authority, a private sector-led operation that would narrow the state’s economic development efforts to a handful of key industries, while transferring many of Commerce’s current duties to other agencies.
The proposal comes from a set of recommendations from a Commerce Advisory Council formed by Brewer in January. Brewer said a bill is being drawn up and she hopes to get legislative approval for the plan before the Legislature adjourns sine die, which is expected in mid-May.
“Today, I’m introducing a 21st century approach to advance Arizona’s economy. This is not going to be another one of those grandiose plans that ends up unfunded, unread, collecting dust on someone’s shelf,” Brewer said at the press conference in the Executive Tower.
Brewer said the authority would be chaired by the governor and led by a private-sector CEO and a 15-member board comprised of business and community leaders from across Arizona. She said it would bring an end to the “revolving door” at the top of the Department of Commerce, which has seen seven directors in the past 10 years. She said she expects the transition to be complete by the beginning of 2011.
Commerce Director Don Cardon, who took over the department in June and has already presided over one restructuring of the department, said Commerce has become bogged down by 57 legislative mandates and 16 executive orders. Instead of the broad mission it has pursued in the past, the new authority would focus specifically on the solar, science, technology, aerospace and defense industries.
The plan would eliminate many of the broad, unfunded and often unimplemented duties of Commerce and allow the authority to both diversify Arizona’s economy with new business investment and help businesses that are already in the state expand and create new jobs, Cardon said. Cardon said the authority would eliminate much of the bureaucracy that has long hindered the Department of Commerce.
“Institutionally, over many, many years, it really developed a reputation of being somewhat of a quagmire of political placements,” Cardon said at the press conference.
Brewer said she believes she has legislative support for the proposal. Sen. Barbara Leff, a longtime supporter of the sometimes unpopular department, and Rep. Michele Reagan attended the press conference and were thanked for their support by Brewer.
The state budget for the authority will essentially stay the same. Commerce’s budget for the current fiscal year is about $6 million, down from about $9.1 million just two years ago. Cardon said the new authority would keep 45-50 of Commerce’s 96 employees, with others being transferred to other state agencies.
“We’re not laying people off,” Cardon said.
He said the state will begin a nationwide recruitment process for a CEO over the summer. Cardon will stay on as Commerce director until the transition is complete.
The advisory council’s report recommends a “performance-based funding model” in which the new authority must show a specific return for each dollar invested by the state. The authority would be partly modeled on other public-private economic development partnerships in other states, such as Virginia and Florida.
The advisory council formed by Brewer in January was chaired by sports/business mogul Jerry Colangelo, and included top executives from some of Arizona’s biggest companies, such as Arizona Public Service and Tucson Electric Power.