Gov. Hutchinson plans to reduce number of state agencies by 50% (Updated)

Editor’s note: The previous story has been replaced by this report.
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Gov. Asa Hutchinson on Thursday called for reorganizing the state’s current 42 state agencies reporting to him to fewer than 20. He also sought to assure state employees that personnel reductions would occur through attrition rather than layoffs.

Hutchinson said he would present a comprehensive reorganization plan in time for the 2019 legislative session.

“I’m an elected official, and I run the executive branch of state government, and I want a cabinet that I can meet with in this room that shares my vision, that will carry this out every day in the workplace with all of the departments and agencies that are part of their agency of government,” he said.

Hutchinson said the process for reorganizing state government began in 2015 with a bill by former Sen. Eddie Joe Williams, R-Cabot, directing the executive branch to undertake such a reform. Hutchinson created a Transformation Advisory Board in 2017 to lead the effort and report to him by this fall.

Hutchinson made the announcement as the Legislature was preparing to leave Little Rock after the close of a special session. He said he expected multiple pieces of legislation would be required.

“Whatever comes, there’s going to be a lot of tinkering with it. We want to get this right,” he said.

Hutchinson said the last government reorganization occurred under Gov. Dale Bumpers in 1971, when Bumpers reduced the number of agencies reporting to him from 60 to 13 cabinet level agencies.

Since then, state government has expanded, growing to 42 state agencies reporting to him and more than 200 boards and commissions for which he is responsible. The federal government in contrast has 15 cabinet level officials, he said. He said reducing the number of agencies by 50% would create efficiencies by combining functions such as accounting and information technology, reducing rent, and other measures.

He said that “everything is on the table” and that “you have to start with a white sheet of paper” in deciding what agencies would be reduced or combined. However, he ruled out merging the Department of Health and the Department of Human Services. Such a merger occurred under Gov. Mike Huckabee and was later reversed. He said he had asked DHS Director Cindy Gillespie to assure her employees that her agency has already gone through a transformation process, and the effort is not directed at them.

Hutchinson also said the effort wouldn’t focus on those agencies not directly under his control, including the Arkansas Department of Transportation, the Game and Fish Commission, and the state’s public colleges and universities.

Hutchinson said the number of state employees in agencies reporting to him has fallen by 1,000 through attrition rather than layoffs and said he would continue using that method. He said state employees would be asked to help create the transformation. He said he had a conference call that morning with agency directors, and a letter was being sent to all state agency employees assuring them they would not lose their jobs.

“I do not anticipate layoffs,” he said.

As an example of the challenges associated with the unwieldy structure, Hutchinson said his office’s staff interns had been assigned to study the state’s boards and commissions. One executive director of an agency Hutchinson had never heard of could not be located because that person wasn’t showing up to work.

Hutchinson related how he had spoken to a business class at the University of Arkansas where students had been assigned the task of developing an organizational chart for state government. The white board extended from one end of the room to the other.

“The organizational chart for state government could not fit on a white board, and this illustrates the challenge that we face,” he said.

Hutchinson said an earlier effort to merge the Department of Rural Services and the Arkansas Science & Technology Authority into the Department of Economic Development had saved $10 million in three years, faster than the five years it was expected to save that much.

It’s not the first effort by Gov. Hutchinson to reduce the size of government. During the 2017 legislation session, the General Assembly passed more than eight bills that reformed state pay plans, consolidated several boards and commissions, and reorganized several state agencies. Those efforts included moving the state Office of Energy into the Arkansas Department of Environmental Quality and putting the War Memorial Stadium Commission under the management of the state Department of Parks & Tourism.