Business groups, consumer advocates and legislators say they are skeptical of the governor’s plan that would merge the agency charged with regulating businesses in the state with a department whose main job is to hang out the welcome sign for new development.
The proposal, which was tucked into Gov. John Baldacci’s two-year state budget, would merge the Department of Economic and Community Development with the Department of Professional and Financial Regulation.
Rep. John Brautigam, D-Falmouth, expressed the concern of many at a public hearing Friday when he compared the proposal to the way sea life is housed at an aquarium.
“The penguins are in one tank and the sharks and barracudas are in another,” he said. “It might be very efficient to put them all in one tank, but will we still have penguins in this state if this happens?”
Former House Speaker John Richardson, the new commissioner of the Department of Economic and Community Development, assured the legislative review panel the merger, which would create a new Department of Commerce, would avoid as many conflicts as possible.
“We understand that there are concerns about joining the businesses enforcement arm of state government with the economic development arm,” Richardson said, but other states do it. He said many departments in Maine government today represent competing interests.
The Department of Economic and Community Development currently houses the offices of tourism, business development, international trade, film and innovation and science. Professional and Financial Services regulates banks, credit unions, the insurance industry and mortgage companies and licenses a long list of professionals, from accountants to pharmacists.
Some legislators got concerned when they discovered that by approving the budget they would allow the merger even though much of the discussion up until Friday’s hearing was on the planning process to bring the two departments together.
Sen. Nancy Sullivan, D-York County, chairman of the Insurance and Financial Affairs Committee, said many believed the Legislature would have a chance to vote on a final merger plan next year.
“The chance to vote on this reminds me of laptops,” Sullivan said. “I never got to vote on that either.”
Joe Ditre, head of Consumers for Affordable Health Care, who often testifies before the superintendent of insurance, called the process “very disturbing.” He said there was only a one-page description in the budget on the merger and “zero savings” booked.
“Pull this out and do a study and then come back with legislation that clearly identifies what’s going on,” he said.
Business groups also expressed concern, largely about having the licensing fees their members now pay to support the Department of Professional and Financial Services taken to support other programs in the new department.
Mark Walker of the Maine Bankers Association said his organization would not support a merger if there weren’t “firewalls” between the various offices so the economic development side of the house could not just “sweep dedicated revenue away from us.”
There already have been times when the Legislature took excess licensing revenue to balance the state budget.
While no savings are booked in the governor’s budget as a result of the proposed merger, Richardson estimated $1 million could be saved and used to lower business licensing costs and fees. Addressing consumer concerns, Richardson said he would like to create a new position of superintendent of consumer protection, just like there are now superintendents of insurance and banking.
As the commissioner of the new Commerce Department, Richardson said he would be prohibited under law from interfering with any regulatory decisions made by those superintendents.
An advisory board already is working on the merger plans, and it will be up to the legislators to decide if they want to change language in the budget to require those plans to come back before them for final approval.
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