EDC cuts staff, ends marketing contract

The R.I. Economic Development Corporation is retooling now that the agency’s state appropriation for fiscal 2012 has been cut by 15 percent – a decrease that follows several years of similar budget reductions.
EDC Executive Director Keith W. Stokes said the agency has cut three staff positions, is attempting to renegotiate the lease for the EDC offices at the American Locomotive Works and did not renew its $12,000-a-month contract with Providence-based marketing and communications firm Duffy & Shanley.
In outlining a cost-efficient restructuring to the EDC board recently, Stokes insisted the staff would continue to focus on the development of key sectors such as tourism, defense, manufacturing and information technology.
But Stokes acknowledged that the shrinking state funding has been a challenge, pointing out that the EDC has cut its staff by 30 percent since 2008.
Still, he said the agency’s challenge is no different than what private-sector companies the EDC assists face.
“We’re only reflecting the challenges that our own small-business customers have had to adjust to over the last several years,” Stokes told the EDC board in June. “I think we stand ready to be efficient and effective.”
The $7.7 billion fiscal 2012 state budget approved by the General Assembly and signed into law by Gov. Lincoln D. Chafee in June cut the state’s direct appropriation for the EDC to $3.95 million, down from $4.65 million the previous year.
It was the same budget cut that was first proposed by Chafee, who serves as the EDC chairman, in his tax-and-spending plan unveiled in March.
“The governor wants this organization to be focused,” Stokes explained recently. “He doesn’t want it to be all things to all businesses.”
The state’s direct contribution isn’t the EDC’s only source of income. Its $14.7 million fiscal 2012 budget includes $3.58 million in federal grants and another $5.73 million that is largely made up of legislative grants and allocations for specific programs. For instance, the EDC will receive $2.4 million from the federal government that is earmarked for the renewable energy fund, and the state is allocating $2 million for the Slater Centers for Excellence and another $1.5 million for the STAC Research Alliance.
But the cuts to the state’s direct appropriation to the EDC have taken their toll. The annual allocation has declined $2 million in five years, from $5.94 million in fiscal 2008. In that time the agency has cut its full-time-equivalent positions by 30 percent, according to the EDC.
The EDC’s focus areas will be:
&#8226 Revitalizing and rebranding the state’s urban core.
&#8226 Developing ways for business to access capital more easily.
&#8226 Making it easier to do business in Rhode Island.
&#8226 Creating “business-ready infrastructure hubs” such as Providence’s Knowledge District.
&#8226 Growing key industries such as tourism, defense, manufacturing and marine trades.
&#8226 Developing “business attraction and cultivation” plans.
The restructuring also calls for the appointment of a director of regulatory reform and a director of urban business. The EDC still has to fill the position of managing director of financial programs, a job held by J. Michael Saul, who left the EDC earlier this year.
Stokes, a longtime EDC board member before his appointment as director last year, said he’s seen the agency go through five or six restructurings since 1994, including one just last year under former Gov. Donald L. Carcieri.
As part of an effort to stem future budget cuts, Stokes said the EDC is assigning its research staff to develop ways of measuring the agency’s effectiveness, and getting the word out about it. &#8226