Leglislators see conflict in merger of agencies Plan seeks to create Commerce Department

AUGUSTA – Gov. John Baldacci’s proposal to merge a state agency charged with consumer protection and business regulation with one that promotes business development has caught a number of lawmakers by surprise.

“I can see this getting confusing,” said Sen. Lynn Bromley, D-South Portland, who co-chairs the Legislature’s Business, Research and Economic Development Committee. “Promoting economic development is very different from regulating business.”

In an effort to streamline government and enhance his administration’s focus on business, Baldacci has proposed combining the existing Department of Economic and Community Development and Department of Professional and Financial Regulation. The new agency would be called the Department of Commerce.

But Bromley, whose committee just recommended the confirmation of former House Speaker John Richardson as commissioner of DECD, said she and others were surprised when the merger plan was announced as part of the governor’s two-year budget proposal earlier this month.

“Even his nominee to be commissioner of DECD did not know about this,” Bromley. “And yes, I certainly do have concerns with the proposal.”

DECD has 43 positions from all of its various funding sources, while PFR has 218 positions from its various funds. Under the governor’s proposed legislation, whoever is DECD commissioner when the merger is approved would become the new head of the Department of Commerce. But Bromley and others still worry the needed emphasis on economic development would be lost in the larger agency at a time when there are several major economic development initiatives under way.

“We have the report of the research and development committee and the Brookings study,” she said. “We are at a time when we have the opportunity to move forward, and I don’t want a reorganization of agencies to get in the way of that.”

Bromley said she wants a commissioner who can focus “laserlike” on the economic development issues and believes there are other lawmakers with a similar goal.

“That is one concern, but I also think we need to weigh whether we want to have development and regulation together,” she said. “They are very different functions.”

PFR is an umbrella agency, with two of its largest divisions regulating the banking and insurance industries. The department also includes the Office of Consumer Credit Regulation and regulatory boards for dozens of professions.

The ranking GOP member of the Business, Research and Economic Development Committee, Rep. Chris Rector, R-Thomaston, said he shares Bromley’s concerns. But he added those concerns are moderated by Richardson’s background of having served on the legislative committees that had the responsibility of overseeing both departments.

“While I’m concerned,” Rector said, “I think the roles are distinctly different enough that they are going to be able to proceed in a manner that is reasonable.”

Bromley said she wants to see how consumer groups respond to the proposal. She said the regulatory agencies are in place, in part, to protect consumers from banks or insurance companies that DECD may be trying to convince to expand in the state.

“I can see this getting confusing,” she said.

Rector said he also is a bit “uncomfortable” with language in the proposal automatically making the current head of DECD the new Commerce commissioner.

“The other committee involved here, Insurance and Financial Services, will not be a part of the process,” he said. “And they cover a lot of what the new commissioner will be responsible for.”

Richardson confirmed he was not aware of the overall proposal, let alone the language potentially naming him the new Commerce commissioner, until the governor announced it as part of his budget package.

“I can tell you it does not bother me if they want to hold another hearing for the new position,” he said. “I have been a part of the legislative process and I understand the concerns being raised.”

Richardson said even though as Commerce commissioner he would have oversight over a much larger agency than DECD, his focus would be on economic development.

“I have made that clear to the [Business, Research and Economic Development] Committee,” he said. “I have seen an outline of the new agency and there would be two deputy commissioners so I think I can focus on what I need to focus on and that is improving the state’s economy.”

The governor said while he understands the concerns being raised, he sees the new agency as a “natural fit” and jokes that he is doing his best to reduce the “alphabet soup” of government.

“It will be the Commerce Department, not the Department of Economic and Community Development and the Department of Professional and Financial Regulation. You know people can fall asleep in the time it takes to say both agencies.”

Baldacci said Richardson is the right person to lead the new department and his first task as DECD commissioner will be to set up a transition group to merge the agencies.

“We’re going to see initiatives around reducing paperwork, reducing regulation and also creating more jobs and prosperity for Maine people,” Baldacci said. “I am asking other levels of government to reduce administration; this is part of what we are doing at the state level.”