Governor: No state employees will lose jobs under transformation plan

In taking nearly 30 minutes to explain the finer details of his proposed reorganization plan, Gov. Asa Hutchinson made clear that no employees would lose their jobs and any financial savings and synergies would be realized through attrition, efficiencies and better use of state resources.

“This will be done using existing resources and without increasing staffing levels,” said Hutchinson, who frequently compares running government to private industry. “It improves the delivery of services to Arkansas taxpayers by breaking down silos within state government and by combining agencies in a way that will allow increased coordination within similar programs.”

Following are the proposed 15 agencies.
• Department of Health
This agency would include the State Medical Board, State Nursing Board, the Tobacco Settlement Commission, and the state Surgeon General.

• Department of Labor and Licensing
The agency would include the Worker’s Compensation Commission, State Board of Accountancy, Motor Vehicle Commission, and the Occupational Safety and Health Administration.

• Department of Education
This agency would include the Arkansas Department of Education, the Arkansas Department of Higher Education, and career education programs.

• Department of Public Safety
The Arkansas State Police, Arkansas Crime Information Center and the Arkansas Department of Emergency Management are included in this agency.

• Department of Agriculture
This agency would include the Livestock and Poultry Commission, State Plant Board and the Forestry Commission.

• Department of Commerce
This agency would include the Arkansas Waterways Commission, Arkansas Economic Development Commission, State Bank Department and Department of Workforce Services.

• Department of Finance and Administration
This agency would include the Assessment Coordination Department, Lottery Commission and State Revenue Office.

• Department of Human Services
The state Drug Director, Division of Medical Services, Division of Youth Services and Division of Children and Family Services would be in this agency.

• Department of the Military

• Department of Parks, Heritage and Tourism
This agency would include the Parks and Tourism Department, the Heritage Department and the state Library Board.

• Department of Transformation and Shared Services
The Department of Information Services, Employee Benefits, and Office of Personnel Management would be some of the offices to fall under this agency.

• Department of Energy and Environment
This agency would include the Arkansas Department of Environmental Quality, the Public Service Commission and the Oil & Gas Commission.

• Department of Corrections
The Board of Corrections, Arkansas Department of Correction and Parole Board would be included in this agency.

• Department of Inspector General
This agency would include the Office of Medicaid Inspector General and the Fair Housing Commission.

The Game & Fish Commission and the Arkansas Highway Commission, constitutionally separate and independent agencies, would remain as they are. (Link here for a four-page PDF of the proposed organizational chart.)

SAVINGS PROJECTIONS
In outlining his detailed proposal, which included a new organization chart, Hutchinson said he wanted to accomplish six key objectives. They include reducing the number of cabinet-level agencies; assigning all of the more than 200 boards and commissions to a larger umbrella department;  improving the delivery of services; upgrading management control, allowing agencies to maintain their independent services; and create savings for the state and taxpayers.

Earlier but unfinished iterations of the transformation plan were vetted during the 2017 legislative session, and DFA officials had forecasted unofficial annual savings of up to $15 million. In response to questions from reporters, however, Hutchinson would not conclusively affirm that total, saying the projected financial savings would be released after the plan is implemented.

“The Department of Finance and Administration looked at it and gave a very conservative figure for the initial years for the transformation, and you have others in the legislature that have bigger dollar signs in their eyes. But I think if you look back on when we moved the (State) Lottery over into DFA, we did not project any savings, we did it for alignment purposes,” said Hutchinson.

“But (DFA Director) Larry Walther will tell you because finance was able to share services, there was over time savings that were created that were very substantial.” the governor continued. “And that has been true, so I don’t want to put an arbitrary number to the savings that will be created this time. I think it is going to take a lot more time and evaluation on it. But I think you will see as time goes on …., the savings will escalate.”

AGENCY MOVES
Among the key proposals that may get pushback from lawmakers include the creation of a new Department of Commerce to house the Arkansas Development Finance Authority, state Economic Development Commission, the Department of Workforce Services , and the Arkansas State Bank and Insurance Departments.

There will also be a new state Department of Transformation and Shared Services that will bring together most state human resources, IT, procurement, construction and building authority, and personnel management under one agency. In addition, the state Department of Corrections and Department of Community Corrections will now be consolidated under one agency, governed by the state Board of Corrections. Those agencies became a flashpoint of controversy earlier this year when the Board of Corrections fired longtime agency Director Sheila Sharp, a move that was supported by the governor.

Hutchinson also said a key area of focus will be to realign some state education functions, giving the state Department of Education the cabinet-level oversight of the state Department of Higher Education, the Martin Luther King Commission and other associated state functions. The Department of Agriculture will also house all the state’s related forestry, farming and other state agri-related activities under one agency.

The state Game and Fish  and state Highway Commissions would keep the constitutionally mandated independent to operations separate from all other state functions. Likewise, the six state-run pension funds, including the Arkansas Teachers and Public Employees retirements systems, would remain independent, along with the Claims Commission, AETN, the state Public Defender Commission and state Election Board.

At the end of the nearly hour-long press conference, Hutchinson said state government employment is down by nearly 1,500 workers in his tenure, mostly through attrition and efficiencies achieved through technology. That leaves Arkansas government with nearly 25,000 employees on the state’s payroll, he said.

After the press conference, Arkansas House Speaker Matthew Shepherd, R-El Dorado, told reporters he looks forward to working with Gov. Hutchinson early next year to move the transformation plan through the General Assembly.

“It just seems to be that this is a (good) first step. There’s more that hopefully in the future we can do, but at the same time you have to kind of set the table, and when you look at the (organizational) chart, all of those agencies and all of those departments how can you achieve true efficiency when you are that spread out,” said Shepherd, who became House Speaker earlier this summer when Rep. Jeremy Gillam, R-Judsonia, stepped down from his post.