Asa’s Reorganization: It’s about management

Asa’s Reorganization: It’s about management

By David Ferguson

Governor Asa Hutchinson announced his plan to reorganize state government.  It will combine several state agencies so that the Governor’s cabinet will be reduced from 42 to 15 agency heads.  Reorganization is a worthwhile effort, but it does not do what many people think.

What it is and what it is not

It is not about making state government smaller. It is about making state government more manageable.

Even the Governor’s Democratic opponent, Jared Henderson, sounds confused over what the proposal is about. Henderson called the reorganization a reshuffling (which it is) but then went on to say: “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.[i] No, the proposal is not about smaller government. Henderson’s statement is an inaccurate talking point intended to appeal to the left.

Libertarian candidate, Mark West, correctly called the plan reshuffling but unlike Henderson he also correctly recognized the plan is not about smaller government.  West criticized the plan saying: “[Governor Hutchinson] 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”.

Yes, it is only a reshuffling but the reshuffling should make it easier for a governor to manage executive branch agencies.

Cost savings?

While Governor Hutchinson hopes there will be some efficiencies created by combining agencies he is not pushing the reorganization as a measure to reduce government.  The Governor cited a dollar amount of savings projected by his Department of Finance and Administration. I won’t cite the amount here because at this point it looks like speculation and wishful thinking.  Even if the plan was final I would be skeptical without specifics. If you are going to save money it will be from one of three ways: reduction in the size of state programs and grants, reduction in staff, or reduction in agency maintenance and operation costs.

  • There has been no talk about reducing the size of state programs, other than a hope of finding some overlap in programs and then eliminating the overlap. Let’s wait for specifics before assuming that will happen.
  • Slashing state jobs is not in the plan. There will not be an immediate reduction in staff costs. The Governor has said if state jobs can be eliminated it will be done through not filling vacancies.
  • That leaves maintenance and operation costs. To find a reduction there you would have to assume the agencies would need less space or that reorganized and combined agencies would get purchasing discounts from having larger orders of supplies, etc., but the buying power of multiple agencies is already being used by having the Office of Purchasing negotiate state government-wide purchasing contracts for everything from pencils to automobiles.

It is way too early to start claiming savings. Let’s see the details.  As a taxpayer, I hope they can find some actual savings.

By the way, the plan will have some additional expenses as another layer of management is created. The Governor said the heads of the new agencies will probably be called “Secretaries” as is the custom in federal agencies.[ii]  This is a new layer of management. The head of the Agriculture Department is already called Secretary, but most agency heads are called directors. I assume directors who do not get called up to the big leagues to be a Secretary will keep their titles as directors. Expect them to also keep their pay.

Also, there will be initial expenses for transitioning the agencies to uniform systems and procedures.

Why bother?

Reorganization is not a first step before reducing government. So, you may be wondering – if it is not about reducing government, why bother.

Reorganization provides the Governor with better control and might produce better management of state government. With 42 state agency heads now being in the Governor’s cabinet, government is harder to manage than if a smaller cabinet was created.

Who will oppose reorganization?

I don’t think many people will be concerned about the idea of reorganizing state agencies, but already there have been some “concerns” and criticisms concerning specific agencies in the plan. This is just part of the necessary discussions that must take place prior to approval by the legislature next year.

The area where I had anticipated the most opposition was in putting medical related licensing boards under one umbrella and agencies and business-related licensing boards under another. Currently these boards are mostly independent of the Governor, although the Governor appoints board members. This may not be the big hurdle I anticipated. The Governor is working to minimize the opposition by saying these boards will keep their rulemaking power and the fees they collect will stay within the licensing board.  A shift in the balance of power from the boards to the Governor is still likely. For example, it appears staff now employed by the boards will be under the supervision of the Governor instead of under the boards.

Work in Progress

The reorganization plan is a work in progress.  It appears the Governor is already considering changes based on comments received about specific agencies.

There have been some laughs over the name of one of the proposed super agencies, “Transformation and Shared Services,” which sounds like a long-winded way of saying “Miscellaneous Agencies.” With a few months to go before the legislature meets perhaps a more descriptive name can be found or perhaps the agencies will find other places to go.

The Governor’s original announcement suggested a reduction in cabinet level agencies from 46 to 20. The plan presented in October proposed 15 cabinet level agencies.  So, even if the final proposal is not quite as ambitious as what has been proposed , the plan might still end up less than the original number of 20.

A lot of work goes into a successful reorganization and not every reorganization is successful. For example, Governor Mike Huckabee’s effort to combine the Department of Human Services and the Department of Health ran into many obstacles because the procedures and systems of the two large agencies were very different.  Once Governor Huckabee left office, Governor Mike Beebe listened to agency frustrations and approved legislation to separate the agencies.

Link to the organizational chart for the plan announced by the Governor on October 3, 2018.

The size of Arkansas government

The question is: Will there ever be an effort to reduce the size of state government?

Although the cost per person for Arkansas state government is high when compared to other states, there has been no effort by politicians to reduce the size of state government.  Republicans have been the majority in the state legislature for six years and we have had a Republican Governor for four years, yet there has been no effort to restrain state government though such measures as performance-based budgeting. The budget process has not changed from the way it was done under the Democrats. It is still more about calculating the percentage budget increase for all state budgets, which means poor preforming agencies and low priority agencies basically get the same budget increase as more needed agencies.  The budget process then moves on to consider specific agency requests for even more money.

Worthwhile effort

Reorganization is not something I can get excited about, but it is a worthwhile effort to help governors better manage executive branch agencies.

I just wish there was as much effort and hype about reviewing state programs and state grants for need and efficiency. Come to think of it, even a little effort would be nice.


[i] Arkansas governor addresses restructuring plan; campaign rivals say it’s a reshuffling, Democrat-Gazette, 10/5/2018

[ii] Hutchinson proposes 42 agencies pare to 15, Democrat-Gazette, 10/4/2018