Feb 16, 2023 - Business

The Shift: Commerce secretary on hunt for "efficiencies"

Photo: Courtesy of the Arkansas Deparment of Commerce

Arkansas' new secretary of commerce confirmed to Axios recently there will likely be fewer state jobs in Gov. Sarah Huckabee Sanders' administration in the long term.

Flashback: Sanders called for an immediate hiring freeze in her inauguration speech.

Hugh McDonald, who Sanders coaxed from retirement to run the department, shared exclusively with Axios his initial thoughts on strategy, philosophy and marching orders from the state's top exec.

Why it matters: The commerce department greases the cogs, belts and pinch points that keep the state's economic engine roaring.

Quick take: McDonald spent 16 years as CEO of Entergy Arkansas, so he thinks in business terms of maximizing efficiency and financial returns. His plan includes:

  • The department is updating its economic development strategy and will continue with traditional efforts like business recruitment and expansion. It will also emphasize entrepreneurship and evaluate sectors where "Arkansas can leverage its strengths and advantages" to boost its economy.
  • Capitalize on the outdoor recreation economy through the Natural State Initiative created by Sanders via executive order in January.
  • Last week, Sanders formed the Governor's Workforce Cabinet — a single entity to bring together work on which six agencies previously coordinated. Workforce development is a priority for his department, so McDonald or his designee will be in the cabinet.
  • Look for efficiencies and make the commerce department leaner by consolidating work.

Reality check: McDonald said there have been no discussions of job cuts, but "there is an expectation we operate more efficiently as a state government, which at the end of the day translates into being better stewards of our taxpayers'" dollars, he wrote in an email to Axios.

What he's saying: "The governor didn't hire me to be a caretaker of the status quo … she wants me to run it like I would run a business," McDonald said.

My thought bubble: The Natural State can benefit from a fresh perspective to give its economy a boost.

  • Yes, but: "Efficiencies" is code for trimming perceived waste.
  • Shrinking, or at least capping, state government is one lever the administration will need to pull to offset income tax cuts while increasing spending in areas such as much-needed raises for teachers.

🆕 The Shift is a new weekly feature to catch up quick on what's happening in Arkansas' economy and entrepreneurial ecosystem.


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