Kyrillos:  Plan to Reorganize Commerce Department Needs More Review

Senator Joseph Kyrillos issued the following statement after writing a letter to Gary D. Rose the chief of New Jersey’s Office of Economic Growth asking to delay reorganizing The Department of Commerce, Economic Development and Tourism. 

“The administration hasn’t explained how the reorganization will create a coherent plan for the promotion of economic development. 

After once enjoying a reputation for supporting and fostering business growth, New Jersey now ranks 49th in the nation in terms of business climate.  Too many large corporations are looking to expand outside of the state and small businesses are locating elsewhere.   

A plan to reorganize the structure of the state’s economic development agencies must emphasize the sense of urgency needed to revitalize the economy and grow jobs.  In addition, major revisions to the state’s economic development activities should be accomplished through statutory changes, rather than an executive reorganization plan. 

New Jersey is not only competing with other states for business development, but with countries throughout the world.  The stakes are too high to get it wrong.� 

###

May 1, 2007 

Mr. Gary D. Rose, Chief

Office of Economic Growth

Office of the Governor

Executive Chambers

State House

Trenton, New Jersey  08625 

Dear Mr. Rose:            

 I am writing with respect to the intention of the Corzine Administration to submit, pursuant to the provisions of the “Executive Reorganization Act of 1969,� (N.J.S.A. 52:14C-1 et seq.), a reorganization plan for the New Jersey Commerce Commission.            

 As you are no doubt aware, the business climate in New Jersey stands at an historic low point.  New Jersey once enjoyed a reputation for supporting and fostering business growth and economic development.  Unfortunately, the cumulative impact of five years of onerous, job-killing business tax increases and enhanced regulatory burdens has now resulted in New Jersey is 49th in the nation in terms of business climate, according to the non-partisan Tax Foundation.  It is therefore essential that any effort to reorganize our structure of our economic development agencies be undertaken with the greatest care and bi-partisan consultation.            

Although legislators have been provided a limited explanation of the proposed reorganization plan, the proposal nevertheless raises a number of serious questions that may not be fully answered in the 60-day period for legislative review of such plans pursuant to N.J.S.A. 52:14C-7.  It is my hope that the administration can adequately explain how the following parts of the plan will improve the economic development programs of the State Government.  

First, the proposed reorganization plan intends to transfer the Division of Travel and Tourism to the Department of State, creating an organizational structure for tourism that is nearly without precedent in the United States.  Neighboring states such as New York, Pennsylvania, Connecticut and Delaware all place administrative responsibility for the promotion of travel and tourism in their respective commerce and economic development agencies.  The reorganization plan proposed by the Corzine administration proposes to move these responsibilities to the Department of State.  Although this nearly unprecedented move may have merit, the administration has yet to explain in a concrete manner how this plan will benefit our $40 billion tourism industry.  Aside from nebulous notions of centralizing functions and marrying tourism to the Department of State’s historic role in the promotion of the arts and culture, the administration has yet to offer supporting information and data that bolsters the argument in favor of reordering the agency responsible for promoting the second-largest industry in this State. 

Second, the administration has yet to explain how the proposed reorganization plan will serve to create a coherent plan for the promotion of economic development in this State.  We have all heard of the robust economic development plans that other states have employed when they lure jobs from the high-tax environment that has been created in New Jersey over the last five years.  The information provided thus far to the Republican members of the Legislature fails to explain how the plan will coordinate the currently fragmented business assistance programs of this State. 

Third, the proposed reorganization does not appear to address the overlapping and often duplicative functions with regard to economic development that currently reside in the Commerce, Economic Development and Tourism Commission and the New Jersey Economic Development Authority.  The promotion of export trade, small business and women and minority-owned business functions exist in both agencies, and the plan should make an effort to better coordinate and consolidate these functions.

Finally, I would strongly suggest that any major revision of the State’s economic development activities be accomplished through statutory changes, rather than through the use of an executive reorganization plan.  The 60-day timeframe for legislative review of such a plan in the “Executive Reorganization Act of 1969,� is frankly insufficient.  If the administration’s plans are worthy of adoption, they can only benefit from a robust public debate in a legislative committee.  The enactment of legislation would also give the members of the State’s business community an opportunity to offer public comments on the administration’s plans, and permit legislators of both parties to compare the administration’s proposal with successful economic development, tourism promotion and business development programs that exist in other states. 

I therefore request that the administration delay the submission of their proposed reorganization plan for the New Jersey Commerce, Economic Development and Tourism Commission until such time as adequate answers to the questions cited hereinabove can be obtained, and consider supplanting the plan with comprehensive legislation that can be vetted in a public setting by the responsible standing reference committees of the Legislature. 

Thank you for your consideration of this request. I look forward to your timely reply.                                                                     

                                                                                                              Sincerely,                                                        

Senator Joseph M. Kyrillos, Jr.     

 JMK:jh