[G]ov. Phil Scott said Tuesday his administration could merge the Department of Labor with the Agency of Commerce and Community Development without putting workers at risk.
He signed an executive order Sunday to merge the standalone department, which oversees labor issues, with the agency, which promotes Vermont businesses. The move would create the Agency of Economic Opportunity.
“For our economy to grow, employers need workers, and unemployed workers need jobs,” he said Tuesday. “I believe this reality should be reflected in a single agency.”
Scott said there is currently a “disconnect” between the skills that unemployed workers are building and the skills businesses need from workers to fill their open jobs. Merging the two state entities, he said, “is designed to bridge that gap.”
Two other executive orders would merge the Department of Liquor Control with the Vermont Lottery Commission and take the Department of Information and Innovation — which acts like an IT desk for the government — out of the Agency of Administration to create an Agency of Digital Services.
The executive orders are considered recommendations until the Legislature approves them within 90 days. Either the House or Senate can essentially veto any of the three proposals by voting down one of the executive orders.
Betsy Bishop, the president of the Vermont Chamber of Commerce, has backed the proposal for the Agency of Economic Opportunity. She said in a statement: “Aligning business needs with labor interests will strengthen the employment picture in Vermont and help lead to stronger economic growth for businesses and workers.”
Senate President Pro Tem Tim Ashe, D/P-Chittenden, drew a comparison to the period when the Agency of Commerce and Community Development both promoted and regulated projects funded through the EB-5 visa program.
“For workplace issues, it could raise the same tension where you have promotional economic development activities and also enforcing the labor laws with the same companies that are getting those benefits,” Ashe said.
Sen. Michael Sirotkin, D-Chittenden, said he is “very concerned” about the proposal. “We’ve had this situation with EB-5 where we have the regulator and the promoter-in-chief of business under the same work, under the same secretary, and I think it creates an inherent conflict of interest that workers should be concerned about,” he said.
Sirotkin fought a similar proposal in 2009 when he was a partner at the lobbying firm now called Necrason Group. That proposal was brought by Peter Shumlin, who was a state senator at the time, and Shap Smith, who was House speaker.
Scott’s proposal would pull oversight of workplace safety, including the Vermont Occupational Safety and Health Administration, out of the Department of Labor and into the Department of Public Safety. But oversight of unemployment insurance and workers’ compensation would remain in the Labor Department.
Steve Howard, executive director of the Vermont State Employees’ Association, said state workers would “wait and see” how the 90-day legislative process works out before taking a position on the proposed restructuring.
Scott did not promise any savings from the plan. He said the proposals are about creating managerial efficiency, but he said there would be no job losses as part of the restructuring.
Additionally, Scott clarified Tuesday that he plans to keep the Department of Tourism and Marketing, which is part of the Agency of Commerce and Community Development. At one point he considered eliminating the department.
“Tourism is very important to Vermont, just so we can reiterate,” Scott said.
At the same time, he said the future of Vermont Life magazine, which is run by the Department of Tourism and Marketing and accumulated a deficit of more than $2 million over the years, “remains to be seen.”
“We are looking for options there as well,” he said. “Things have changed.”
Additional restructuring proposals
The Department of Liquor Control and the Vermont Lottery Commission would be combined into a new Department of Liquor and Lottery with a single commissioner, appointed by the governor, and one board.
Scott said the entities are currently being run by two separate boards with different administrative staffs, while they sell and deliver their products to a lot of the same customers, such as gas stations and grocery stores.
“Currently, those businesses have to secure multiple licenses, work with two governing bodies, and use different technology, vendor and processes for both,” Scott said. “By combining both entities under one department, we will help eliminate redundancies and simplify processes for these businesses.”
With regard to the proposed Agency of Digital Services, Scott said the problem with the Department of Information and Innovation was that not every part of state government reported back to the department. He said some agencies have their own IT staff and those people were able to procure software on their own.
Under the new agency, none of those IT workers would be laid off, Scott said, “but they’ll report back to somebody, so we get a better handle on what we’re spending for IT and be able to utilize better buying power and understanding holistically what we’re doing in the process.”
House Speaker Mitzi Johnson, D-South Hero, said she is concerned about Scott’s technology proposal. “What we need is a cultural change, and what’s being provided is a structural change,” she said.
She pointed to the Agency of Natural Resources, which she said figured out how to work more efficiently before turning to IT to speed up some of its processes. In the past, state government has been criticized for turning to complex, customized IT projects to solve managerial problems.
“A lot of people are really frustrated with IT, so I don’t want us to just create a new agency because we’re frustrated with IT,” Johnson said. “I want us to create a new agency because it will actually help improve the way we use resources.”
Ashe, the Senate president, said the chamber would decide on the proposed changes quickly because waiting the full 90 days is “not in anyone’s interest.”
(VTDigger’s Mark Johnson and Anne Galloway contributed to this report.)
