Calling it key to economic development, Gov. Jan Brewer on Wednesday proposed abolishing the state Department of Commerce and replacing it with what she describes as a quasi-public agency.
The proposal would create an Arizona Commerce Authority to head the state’s efforts to convince firms to move and expand here. The authority would be governed by a board of directors, with the governor as its chair and 14 chief executives, business, education and community leaders making up the rest of the panel.
Brewer said the Department of Commerce has been particularly ineffective in promoting economic development.
Part of the reason, she said, is political: Governors have sometimes chosen people to head the agency based more on politics and less on ability. And then, when a new governor takes office, someone new is put in charge of the state’s efforts.
“We’re going to hire a CEO to head this new economic development authority,” Brewer said. “And we’re going to give him a contract.”
By contrast, she said, the state has had seven commerce directors in the last decade.
Don Cardon, the current commerce director, was even more blunt about the agency.
“It really developed the reputation of being somewhat of a quagmire of political placements of employees and favors,” he said.
Brewer said the authority will provide “what Arizona has been missing,” with an aggressive new stance on landing new firms and, in particular, diversifying the economy.
“To our neighbors, I say, ‘Look out: We’re coming after your companies who want a better place to live, a better operating environment, a better place to grow,’” Brewer said.
The governor promised the agency will focus on “targeted industries” including solar, science, technology, aerospace and defense firms.
Less clear is what happens to the agency — or more specifically, the 57 different programs that are now operated from the agency.
Cardon said some of those relate directly to economic development and will be transferred to the new authority. Likely prospects range from the film promotion office to incentive programs for companies that expand here.
But Cardon said there are other functions that may fit better elsewhere.
For example, the agency now computes the monthly unemployment statistics. It also is involved in everything from administering a fund to preserve military installations to a nursing training fund.
All of those, he said, are “incredibly important.”
“But at a time when our nation, potentially the world, is challenged by the greatest economic challenge in history, we need to focus on employment, we need to focus on retention, attraction, expansion of the jobs base.”
Since Brewer took office, the state’s jobless rate has jumped from 7.0 percent to 9.5 percent. Much of that, however, mirrors what is happening with the national economy.
The change will require legislative approval. But House Speaker Kirk Adams, R-Mesa, said he likes what he’s seen of the plan so far — particularly having the agency run by a hired professional rather than whoever the current governor wants to hire.
“The idea that you have a stable person that’s outside the realm of politics in charge of economic development is essential,” he said.
Brewer’s proposal comes as the Senate is weighing whether to approve a House-passed package of future tax cuts for business to spur economic growth. Brewer said she is generally supportive of the measure — at least in concept.
“We know that is something that will spur the economy,” the governor said. But she added a caveat, saying she wants to make sure “it’s done properly and the timing is correct.”