What's the development plan?

At a Jan. 20 hearing on the state’s economic outlook, the chairman of a House division questioned why the Department of Employment and Economic Development has no comprehensive, statewide economic development plan.

“DEED doesn’t have a plan. Has it ever had a plan? Does it ever plan to have a plan?” asked Rep. Tim Mahoney (DFL-St. Paul), chairman of the House Bioscience and Workforce Development Policy and Oversight Division.

Commissioner Dan McElroy responded that Minnesota has a diverse business climate with many different regional economies, and said it makes more sense to pursue “regional strategies” within the state rather than a single overarching plan.

“I do not believe that in a state as diverse as Minnesota, a single economic development strategy is appropriate. We have a cluster of related economic development strategies in a diverse economy,” McElroy said.

The two spoke at the hearing on how recent national economic trends have impacted the state’s business activity. No action was taken.

McElroy and Commerce Department Commissioner Glenn Wilson testified that the state’s credit markets have tightened in response to the recent housing market crash and the ensuing Wall Street bailout, causing an economic slowdown. Mahoney suggested the state should have a unifying plan to promote an economic recovery.

“Can you explain to me how you go to businesses in the state — or businesses on the east coast, west coast, Sweden, wherever — and say, ‘We don’t have a plan, but we’d really like you to come and create a business in Minnesota?’ I don’t follow that,” Mahoney said.

McElroy countered that the department’s programs had been developed over a long period of time, and that many were designed to meet specific needs. He said changing or consolidating programs might not be advisable.

“It is a big and complex state, so having a lot of programs, we do our best to make them fit the needs where we can,” he said.

Meanwhile, Rep. Steve Gottwalt (R-St. Cloud), the division’s Republican lead, suggested that any economic recovery plan should include some kind of tax relief to businesses. He argued that the state’s corporate tax rate is more burdensome than in competing states.