Gov. Hutchinson’s transformation plan seeks to cut state agencies from 42 to 15

Gov. Asa Hutchinson on Wednesday (Oct. 3) before an overflow crowd gathered at the State Capitol unveiled his long-awaited “transformation plan” to shrink the size of Arkansas’ state government from 42 to 15 agencies. It’s a proposal that has been in the making almost since he took office in early 2015.

Hutchinson said the massive effort to downsize state government for the first time in five decades would be historic if eventually approved by the legislature. He said the proposed reorganization was put forward in order to give state lawmakers, government officials, employees and policymakers time to digest the details and offer feedback before the 92nd General Assembly begins in January.

“Today, represents the largest reorganization of state government in Arkansas history,” Hutchinson told the standing-room only crowd of state officials and policymakers at the Governor’s Conference room that spilled into the halls of the State Capitol. “This long overdue and comprehensive reorganization effort will realign agencies to reflect a more and efficient way to operate state government without cutting services.”

Since taking office in 2015, Gov. Hutchinson and his staff reviewed a long-list of ways to streamline state operations, including three tax cut initiatives passed during the regular and fiscal legislative sessions during his tenure as the state’s top executive officer.

Following the fiscal session that ended earlier this year, Hutchinson first announced plans to present his far-reaching transformation plan to reduce by 50% the number of cabinet-level agencies in state government to the General Assembly for the 2019 legislative session that begins in January.

There are now 42 cabinet-level agencies reporting directly to the governor. The new plans will reduce that to fewer than 20 with the goal of more efficient delivery of services, the governor said. One of the major tasks Gov. Hutchinson carries out almost weekly as the state’s chief executive officer is directing the unwieldy number of agencies, boards and commissions that report to him, some that are highly-sought after posts with salaries and government perks.

In 1972, then Democratic Gov. Dale Bumpers led an effort to reduce the number of state agencies from 60 to 13 major departments. However, over the next 50 years, state government bureaucracy has grown to include more than 200 boards and commissions on top of the 42 cabinet level agencies.

Hutchinson’s new initiative began with Senate Bill 1202 that former Sen. Eddie Joe Williams, R-Cabot, sponsored in 2015. The bill directed the executive branch to consider this type of reform in the organization of state agencies. The Senate bill also called for the creation of the Transformation Advisory Board (TAB), which the governor created in February 2017 and asked 15 people in public service and private industry to serve on the board voluntarily to assist the chief transformation officer in evaluating proposals and making recommendations to the Governor on savings opportunities.

The board is chaired by Fort Smith businessman Michael Carroll. Lt. Gov. Tim Griffin, who attended Wednesday’s event, serves as vice chair. Amy Fecher was appointed as the state’s Chief Transformation Officer in December 2016 within the governor’s office to drive the government-downsizing initiative.

“I applaud Governor Hutchinson’s efforts to transform state government. A leaner, smarter state government that spends less is necessary to provide better value for taxpayers, reduce our tax burden, compete with other states, and grow more good paying jobs for hardworking Arkansans,” Griffin said.

CONSOLIDATION EXAMPLES
Under the new plan, Hutchinson said he hopes to reduce the number of cabinet-level agencies to the same level as the federal government, which has only 15 major departments. Some changes to downsize the number of state government agencies have already taken place. For example, at the beginning of the state’s new fiscal year on July 1, Hutchinson announced that state officials had successfully merged three autonomous boards – the former State Board of Embalmers and Funeral Directors, the Burial Association Board and the Arkansas Cemetery Board into the Funeral Services Division – into the larger state Insurance Department.

Under Act 788 of 2017, which was also sponsored by Sen. Williams, the law requires the newly created State Board of Embalmers, Funeral Directors, Cemeteries and Burial Services to include two licensed embalmers/funeral directors, two owners or operators of a licensed perpetual care cemetery, two people engaged in the operation of a burial association, and two consumer representatives, including one person to represent elderly consumers.

Other agencies have been consolidation into larger departments. The once independent state Lottery Commission is now part of the state Department of Finance and Administration, a change that took place during the 2015 session. Also, the state Department of Energy is now a smaller sub-agency within the state Department of Environmental Quality.

OPPOSITION REACTION
Jared Henderson, the Democratic candidate for governor, said the plan simply “rearranges” the state’s problems.

“Arkansans deserve bold leadership that solves our problems, not rearranges them. It’s clear Gov. Hutchinson is still stuck in the 40-year-old political debate of bigger government versus smaller government rather than tackling our state’s most critical problems,” Henderson said in a statement. “We need to leaders to devote this much effort into truly transforming our education system to serve every teacher and child, transforming our healthcare system to allow patients to receive affordable services and prescriptions no matter their pre-existing condition, or transforming our economy to focus on building small businesses in every community rather than bringing in overseas corporations to a handful of towns.”

Libertarian gubernatorial candidate Mark West also said the plan doesn’t adequately address the state’s problems, and amounts to election year “pandering.”

“Our Governor has had four years to come up with a plan and I’m disappointed that this shuffling of the deck was the best he could come up with in that time. He recognizes overlap and redundancy but fails to really manifest them into sizable cuts. His big government allies aren’t going to lose much sleep over his plan,” West noted. “Arkansas taxpayers will see little difference, either in their tax burden or in how they receive government services. This is nothing more than election year pandering to appear to be doing something without actually doing substantial measures that taxpayers will notice.”

West said his “Committee On Spending & Taxation” (COST) plan would do more than Gov. Hutchinson’s plan to reduce state government. He said his plan would also “examine agencies and departments that have overstepped their constitutional authority and target them for cuts.”