The Minnesota Department of Commerce faces a balancing act between supporting the growth of the industries it regulates and keeping their business practices on the straight and narrow.
For the new commissioner, Mike Rothman, the balancing act will be a little more precarious and high-stakes.
Rothman, an attorney specializing in insurance law at Minneapolis-based Winthrop & Weinstine, takes over the office when many politicians and citizens want to protect the state’s business community and give it every available advantage to resume hiring and put wages in more wallets.
But he also comes into office on the heels of his predecessor, Glenn Wilson, a congenial administrator who was the object of growing criticism during his eight-year tenure. Critics said his department spent too little on enforcement and were slow to respond when clear business violations occurred.
Wilson disputed those criticisms, but they were enough to make Legislative Auditor James Nobles say that he will propose investigating whether the department’s enforcement procedures have been adequate.
“I’m very aware of all those criticisms,” Rothman told Finance & Commerce on Tuesday. With just three weeks under his belt, he was not ready to outline specific shortcomings and offer fixes. But he said he intends to put those criticisms to rest.
“Taking care of the public interest and protecting consumers is something I take very seriously,” Rothman said. “It’s part of the executive function; it’s spelled out in the statutes for this agency but it’s a high priority for me, too. Under my watch it will be a priority for the agency.”
He will have to solve a riddle, however, to keep that promise: how to pay for it. All state agencies are under pressure to cut spending to help close the $6.2 billion biennial budget gap. And that will make it very difficult to beef up enforcement procedures as the agency keeps up its oversight of a broad range of state industries. Those industries cover the waterfront – from banks and credit unions to stockbrokers, insurers, electric utilities and cosmetologists.
“Our department will contribute its fair share to the budget resolution that finally occurs,” Rothman said. “But we’re going to effectively regulate the industries that we regulate. We’ll find ways to allocate our resources to be sure that gets done.”
The department’s budget is $369.2 million for fiscal 2011.
The other half of Rothman’s balancing act is to support the state’s wage-producing businesses, and he insists that his department will be an enthusiastic partner to help businesses grow, and grow responsibly.
“Minnesotans understand that jobs are important,” he said. “We’re focused on that, just as much as the consumer protection piece.”
The industries under the Commerce Department’s regulatory purview are considered key contributors to the state’s economic future. Finance, utilities, energy production and telecommunications will either bankroll or provide the skeleton and knowledge tools to build a 21st century economy.
“Those are all industries where there are exciting opportunities,” Rothman said, adding that the role the Commerce Department plays will be to help the state keep focused on what is needed to fuel their long-term growth.
“We need to be asking where we want to be 10, 20, 30 years from now, and what infrastructure do we need to get there. We’ll try to keep our eye on what we need to do today to make sure our kids have the jobs, the economy, they need,” he said.
State businesses will give crucial guidance in charting that strategy, and that is why Rothman has been calling on businesses executives and trade association representatives since he took office.
One more major – perhaps monumental – task remains on Rothman’s list of duties.
The agency is responsible for creating Minnesota’s health insurance exchanges – the marketplace for competitively priced insurance policies mandated by last year’s national health care reform law.
That is one of the challenges that probably brought Rothman to Gov. Mark Dayton’s attention. Before coming to the Commerce Department, he was an attorney specializing in insurance law, and he had worked for four years for the Minnesota Senate.
He is in a hurry to get exchange planning moving. He recently appointed April Todd-Malmlove, a former health economist with the state, to lead the effort from the Commerce Department.
And he moved to obtain a $1 million federal grant in January to start laying the groundwork for the planning process. The other 49 states had gotten those grants earlier – Gov. Tim Pawlenty ordered state agencies not to apply, saying the reforms were “an intrusion by the federal government into personal health care matters.”
“We’re doing everything we can now to catch up,” Rothman said.
The development of those exchanges, he said, will be a place for consumers and businesses to shop for coverage, but they will also be part of the larger effort to rethink the way health care is delivered – to make it more cost-effective and useful.
And Rothman thinks those benefits eventually will become clear to skeptics of national health care reform.
“I think businesses, especially small- to medium-sized businesses, will see a new opportunity here to help them contain growing health care costs, and they will buy in,” he said. “This is a way to make health care affordable for all the businesses in Minnesota.”
Key stops in Mike Rothman’s career
Since 2002: Attorney, insurance law, Winthrop & Weinstine
2007-07: Adjunct professor, insurance law, University of Minnesota
1996-2002: Attorney, insurance law, Barger & Wolen, Los Angeles
1989-92: Minnesota Senate, aide to the assistant majority leader