A legislative report blasts a state agency in charge of expanding the economy, saying it believes the Department of Business, Economic Development and Tourism's recent actions could hinder instead of help the economy and lower job counts here.

The report by the Legislature's economic development committees delves into recent layoffs at the department, saying cuts to various offices will cause irreparable harm to the economy and businesses if left unchecked.

The report is the product of a September hearing in which legislators probed how DBEDT and its director, Ted Liu, were responding to state government layoffs in the face of budgetary shortfalls.

Legislators concluded they hope to restore some of the positions that were abolished during the next legislative session.

"While other states have accelerated their efforts to expand programs generating economic value, DBEDT has taken the opposite tack, and your committees believe that DBEDT has lost all credibility to implement economic policies on the state's behalf," according to the 13-page report issued by state Rep. Angus L.K. McKelvey and state Sen. Carol Fukunaga.

"Against this backdrop, the director of DBEDT will have to assume responsibility for shortcomings or deficiencies that result from the departmental layoffs he initiated."

The hearing came in the wake of reports Liu was eliminating most of the positions in the state Film Office. The office is responsible for processing film permits and helping attract film, television and commercial work to the Islands. Film spending can amount to more than $100 million annually.

Among the positions chopped by Liu were the head of the Film Office and the Coastal Zone Management program manager. The DBEDT librarian and small-business advocate positions also were cut.

Other positions eliminated included the manager of the Community Based Economic Development program and the Enterprise Zone/Partnership coordinator.

Liu yesterday said the small-business functions cited in the report are being covered by other staff. He said he could no longer justify the librarian position given the budget crisis.

"There are bigger problems we need to resolve in order for the economy to recover than having a full-time librarian at a DBEDT library," he said.

Liu has previously told the committee he tried to restructure DBEDT by retaining generalists capable of supporting multiple programs and functions, and that in two instances, professionals who played key roles in Enterprise Zone and Small Business Advocate position were still within the department and available to help support the program.

"This is the only way by which the department can effectively and efficiently fulfill its mission, functions and responsibilities with its available staffing levels," Liu said in an October letter to the committees.

The report, however, was critical of layoffs and employee bumping rights that resulted in people with little experience or qualifications for certain programs being asked to cover those functions.

It said the Coastal Zone Management program changes could result in reduced federal funding, while loss of half of professional and support personnel in the Land Use Division might seriously compromise the state's ability to articulate and pursue positions in high-profile land-use cases.

The report said Liu must be "accountable for layoff policies that appear to have little relationship to cost-savings and departmental efficiencies."

Abbey Seth Mayer, director of the state Office of Planning, said the state has already been able to save the position in the Coastal Zone Management program by using federal money.

He said the state was also able to fill two federally funded positions in the program with staffers who had been cut from other areas. Functions previously performed by the program manager have been shifted to Mayer and another person.

Mayer said he would continue to be an advocate for the programs under his jurisdiction, with the understanding that state budget cuts are necessary.