Economic development chief under fire from DFLers

Minnesota finance officials are blaming a $1.2 billion budget deficit on the state's loss of jobs -- and a key lawmaker says that's why changes are needed in the agency responsible for growing new jobs.

DFL Senate Majority Leader Larry Pogemiller says he wants to replace Dan McElroy as commissioner of the Department of Employment and Economic Development. McElroy has no plans to leave, which could set the stage for a confirmation showdown.

Minnesota's unemployment rate dipped to 7.4 percent in November. But Pogemiller says the state still isn't where it needs to be on jobs. Pogemiller wants a new strategy -- and new leadership at the Department of Employment and Economic Development.

"I don't blame the current leadership for the overall economic situation. Obviously this is a national and international problem," said Pogemiller. "But I do think it's pretty apparent that the work that has been done has not been at the highest level we need to be properly positioned as the economy comes out of the slump."

Pogemiller wants Gov. Tim Pawlenty to replace Commissioner Dan McElroy, even though Pawlenty has only a year left in office. He wants an experienced professional in the job, not a political appointee.

McElroy has held the top job at DEED since 2007. He's a former Republican state legislator and mayor from Burnsville, who also served as state finance commissioner and Pawlenty's chief of staff.

Pogemiller insists he has nothing personal against McElroy.

"He was on the tax committee for years. I was on tax conference committees with him. I like him. He's a good guy. I just don't think he's an effective leader of the agency," he said.

Pogemiller made a similar argument against McElroy a year ago, and had also threatened that the Senate was ready to vote down his confirmation, which would oust him from his job. The vote never came last session, but Pogemiller is not ruling it out for 2010.

The DFL-controlled Senate has already fired two members of Pawlenty's cabinet. Lt. Gov. Carol Molnau lost her job as transportation commissioner, and Cheri Yecke was rejected as education commissioner. Pogemiller says the Republican governor's second choices for those posts were much better.

McElroy, for his part, says he doesn't understand where Pogemiller's coming from, but isn't going to speculate.

"I like [McElroy]. He's a good guy. I just don't think he's an effective leader of the agency."

"I'm not going to get involved in that. I concentrate on helping and leading this great team to do some really important work. And it's important and exciting," said McElroy. "I don't want to give people the idea that we're Pollyanna-ish and think that these are easy times. But there are some things happening that lead me to believe that Minnesota will be part of the recovery, and may recover a little earlier than some other states."

McElroy speaks enthusiastically about his agency's ongoing efforts to help small companies grow. And he points to the latest upticks in jobs and hours worked as signs of an improving labor market.

Despite those recent improvements, Minnesota lost 83,900 jobs in 2009, with the biggest decline in manufacturing.

McElroy says he'll let the governor judge his performance as commissioner. And he says there are plenty of people who believe the state's economic development strategy, which hinges on the tax breaks provided through the JOBZ program, is working.

"We work with literally hundreds of local economic development agencies and professionals, initiative foundations, regional development corporations. And they seem to think we're on the right track," said McElroy.

Republican legislators are standing up for McElroy. Sen. Geoff Michel, R-Edina, says he wants to do more on the job front too, but he's not blaming one state official.

Michel says he's a big fan of McElroy, and he doesn't like seeing a threat of firing held over his head. He calls it petty politics.

"Barring a felony, the governor should have among his cabinet and among his commissioners the people that he wants," said Michel. "Any particular fights that people have with this administration really are probably fights and philosophical debates with the governor, and not any one particular member of his cabinet."

Michel says he hopes the Minnesota Senate focuses its energy on balancing the state budget, rather than fighting over the confirmation of a commissioner.

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