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Arkansas' Ambitious Plan to Reorganize State Government

The governor wants to downsize the number of cabinet-level agencies by more than half -- without laying people off.

Arkansas Gov. Asa Hutchinson, left, unveiling his reorganization plan.
(Twitter/Gov. Asa Hutchinson)
Arkansas Gov. Asa Hutchinson wants fewer people at his decision-making table. Earlier this month, he announced dramatic reorganization plans to cut the number of executive branch departments in his state from 42 to 15. 

“It’s not to diminish any of these individuals, it’s just hard to have conversations,” the governor said at a press conference announcing his plans. “I envision an actual meeting of my cabinet where I can run tough ideas by [them] and we can be an effective team that helps accomplish the mission of state government.”

Hutchinson has numbers on his side. The U.S. executive branch, which is dramatically larger than Arkansas’ overall, has been functioning with a cabinet of only 15 people. And the state’s Department of Finance and Administration projects that the changes would save the state $15 million a year starting in 2021.

Part of the savings are expected to come from the new Department of Transformation and Shared Services, which would coordinate the state’s human resource, procurement, facility and technology needs. State officials project that the consolidation could reduce office space needs and costs and could lead to a reduction in staff -- though the governor has boldly vowed this would occur through attrition and not layoffs.

Public management experts attest that government can better achieve its goals if agencies are working closely together. But when the number of cabinet members and agencies grows, sharing -- and the efficiencies it fosters -- becomes increasingly difficult.  

The proposed reorganization would affect just about every one of the state’s 25,000 employees as well as its 200 boards and commissions, almost all of which would be housed in one of the 15 new departments. While Hutchinson vows not to lay anyone off, workers would face new reporting structures, culture changes and shifts in responsibilities. 

It’s not unusual for governors and mayors to shift departments around, merge them, break them apart, create new ones or abolish old ones. In recent years, the governors of Illinois, Kansas, Michigan, Pennsylvania and Vermont have engaged in targeted restructuring efforts. 

However, Hutchinson’s plans are more ambitious than most. There are many lessons to learn from other states’ experiences when downsizing.

In Vermont, less than two weeks after his inauguration, Gov. Phil Scott signed executive orders focused on reorganization. The most ambitious part of his plans was the creation of an Agency of Digital Services, which involved taking technology employees dispersed through dozens of departments and having them report instead to a central IT office. 

The reorganization, which went into effect in April 2017, has yielded good results, such as a tightened procurement process for technology and more effective use of technology personnel, according to agency director John Quinn. But he says there are some things he would do differently.

“If I was to redo this, I would be asking the cabinet for advice on what their expectations were and what their concerns were before we started any reorganization plan,” says Quinn. “It is scary for a new secretary to come in and find that he or she is losing their technical services. They wanted to know who budgets, who talks with the legislature and what the governance model would look like to make sure priorities are being addressed.”

Michigan’s Mike Zimmer, who is in charge of the governor’s cabinet and has watched multiple reorganizations during Gov. Rick Snyder’s eight years in office, stresses that it’s important to be flexible because technical issues often emerge along the way. For instance, federal requirements may stand in the way of a governor’s reorganization plans. Partially for that reason, Zimmer says ongoing communication with employees and agency heads is also vital. 

“You have to very clearly indicate not only what is going on but the why,” he says. “Why are you disrupting my life? What’s the benefit to me and my program?  You have to be able to answer or you’re going to get employee resistance.”

Zimmer has been involved with the creation of the Department of Licensing and Regulatory Affairs, the merger of community health and human services, the formation of the Office of Performance Transformation, and the blending of employment and economic development programs.

In Arkansas, leaders know this will be a long transition. Although it was officially announced this month, planning started 18 months ago, and the reorganization will not occur until 2020. 

The plan still needs legislative approval, but so far, little vocal opposition has emerged except from Hutchinson’s opponents in the governor’s race this November. Democrat Jared Henderson said Hutchinson was stuck in a “40-year-old political debate of bigger government versus smaller government rather than tackling our state's most critical problems," while Libertarian Mark West criticized the plan for not going far enough in making sizeable cuts.

Meanwhile, state employees have shown little resistance.

“Layoffs was my one concern, and that was put to bed immediately,” says John Bridges, executive director of the Arkansas State Employees Association. From the time the reorganization planning started, the governor’s office tasked Bridges’ organization with gathering employee ideas and reactions. “They were upfront with us from the very beginning. I don’t think that’s too common.”

This appears in the Management newsletter. Subscribe for free.

Caroline Cournoyer is GOVERNING's senior web editor.
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