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Dem Lawmakers, Local Officials Question Cuts In Economic Development Agency

The governor recently announced plans to do away with the state’s role in assisting local authorities with planning. The jobs plan included a reduction of 71 positions in ECD by eliminating the local planning offices.

Gov. Bill Haslam stuck to his reason Thursday for eliminating local land-use and growth-management planning offices in the Department of Economic and Community Development, while Democrats and some local officials are criticizing the move.

Haslam said Thursday the decision was based on whether the offices were performing a state task or a local task, and he had concluded they were doing local tasks, so he will discontinue the program.

“It would be like if the state was running fire departments in some communities but not in others,” Haslam said.

The governor has often stated that when assessing state government performance, the first question should be whether the activity is something the state should be doing anyway. He has concluded in this case the work should be left to local governments.

The differing views on the planning issue is the latest example of disagreements over the way the Department of Economic and Community Development is operating under Haslam, as opposed to his predecessor, Phil Bredesen.

Haslam’s team has shifted the focus of the department’s work toward expanding existing businesses in the state, with less emphasis on recruiting outside businesses, which drew great attention under Bredesen.

“We’re really disturbed about the whole direction at the Department of Economic and Community Development that they’re taking,” Rep. Mike Turner, D-Old Hickory, the House Democratic caucus chairman, told reporters Thursday.

The former Knoxville mayor announced plans to do away with the state’s role in assisting local authorities with planning when he announced his jobs program for the state on April 20. The jobs plan included a reduction of 71 positions in ECD by eliminating the local planning offices. About 60 workers are expected to actually lose their jobs, while vacant positions account for others in the total.

Currently, the state operates six local planning offices that assist local officials in planning for growth. The services are offered for a fee, which goes into state coffers.

The issue came up in a Finance, Ways and Means Committee meeting on Tuesday where Finance and Administration Commissioner Mark Emkes described revisions in Haslam’s budget proposal.

Emkes faced questions from Rep. Larry Miller, D-Memphis, and Rep. Craig Fitzhugh, D-Ripley, the House minority leader, on the local planning issue.

Fitzhugh made the point that while the administration shows $2.2 million in savings by cutting the planning services to local governments, the state would also lose $1.7 million that was coming back to the state in fees for those services.

Fitzhugh said that looked like a “pretty good bang for the buck” under the current arrangement.

He reiterated his concern on Thursday in a meeting with reporters.

“I’m from a rural area, and I know factually that these are vital to economic development in our rural areas,” Fitzhugh said. “They give a consistent means of planning, and they give our local governments the ability to have professional services that they otherwise could not afford.

“I hope we look long and hard before we do away with that.”

Emkes, in his committee presentation Tuesday, said instead of the state providing the local planning assistance the work would probably fall to the local government or private industry. The potential of having to turn to the private sector has raised concerns among Democrats that the costs would hit local governments hard.

There was some confusion in the debate in the committee meeting Tuesday.

Rep. Gerald McCormick, R-Chattanooga, the House majority leader, said Commissioner Bill Hagerty of ECD had told him the work would not be eliminated.

“The way he described it is he’s going to have a team in Nashville rather than have a team spread out across the state that most people didn’t know existed, quite frankly, and do it in a more effective way with fewer employees,” McCormick said.

But Hagerty said Thursday that the state program will indeed be abolished.

“I think what leader McCormick was referring to is the fact we’ve got a 90-day plan to transition all of the functions to the local level, whether that be to private-sector providers or to other counties and municipalities that provide that function,” Hagerty said Thursday.

“To the extent there are any gaps that remain open, we will examine that and retain a small cadre of staff to address that beyond the 90-day period, so there may be a small number of people who are held behind to address the gaps that we’re not able to close during our transition.”

Since Haslam announced the cuts of the local planning offices, some officials in cities such as Cookeville, Johnson City and Shelbyville have voiced opposition to the plan. One Putnam County commissioner has proposed a letter from the body to protest the decision, but another commissioner said it was a simple matter of cost-cutting in Nashville and that the focus should be on seeking alternatives.

Fitzhugh said in the Finance meeting Tuesday that in his city the local government pays about $8,100 a year for the state service and that if it had to hire a planner it would probably cost 10 times that amount.

“So, you know, that could be a tremendous local cost that they have to bear,” Fitzhugh said.

Haslam, when asked about the decision Thursday after he gave a speech in Nashville on job creation, restated his earlier position.

“What we looked at is we said: Is this a function that is a local government function or a state function? And if it’s subdivision planning, which is most of what these folks were doing, I think it is a local function, not a state function,” Haslam said.

3 replies on “Dem Lawmakers, Local Officials Question Cuts In Economic Development Agency”

Maybe Memphis, Tennessee will just get washed down the river in all the recent flooding, and there will be no need for economic growth and development for the largest city in this state.
Is this Republican wishful thinking?
Personally, with all that is being done to harm this part of the state, your objectives appear to have gone far beyond wishing.
Until I hear of something positive being for Memphis from the state’s legislators, I will not change my opinion.

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