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Governor urges lawmakers to approve government 'transformation,' cites $15 million in second‑year savings
Summary
Governor told the Senate State Agencies & Governmental Affairs Committee that consolidating 42 departments into 15 and creating a Department of Shared Services and Transformation would improve service delivery, strengthen managerial oversight and yield an estimated $15,000,000 in savings in the second year, with roughly half in general revenues.
The governor told the Senate State Agencies & Governmental Affairs Committee that a proposed reorganization of state government is “historic” and would yield both cost savings and better delivery of services. He said the administration has budgeted $15,000,000 in savings in the second year of the biennium and that about $7.5 million of that would be in general revenues.
The proposal would consolidate many agencies into 15 cabinet-level departments, create a Department of Shared Services and Transformation and establish a new Inspector General’s office, the governor said. “I believe that transformation of state government will be one of the landmark achievements of this General Assembly,” he said, framing the plan around three objectives: efficiency, improved service delivery and increased managerial oversight.
The governor cited past consolidations as examples, saying moving the Arkansas Lottery into the Department of Finance and Administration generated about $1,900,000 in annual savings and that other realignments have reduced staff while maintaining services. “We are down 1,400 employees during a time of economic expansion,” he said as evidence that transformation can reduce duplication without cutting needed frontline positions.
Budget Director Duncan Baird described the $15 million figure as a conservative estimate based primarily on savings from attrition. “It is, as the governor said, a reasonable and conservative estimate based on the experience in the past,” Baird said, adding that other savings — in rent and office space — were known to exist but not yet included in the estimate.
Lawmakers pressed the administration on timing, oversight and the independence of boards that would be attached to larger agencies. Secretary Gardner and several senators asked whether regulatory boards would lose their independent licensing or disciplinary authority; the governor replied that boards such as the state medical board and nursing board would retain regulatory independence while receiving administrative support (IT, human resources and physical space) from parent agencies.
Several senators also warned that executing a wide reorganization on a single transition date would be a heavy lift. “I am a little bit nervous that we're going to do all of this at one time,” Senator Hickey said. The governor said a transformation advisory board has been working on the plan for about a year and a half and that the administration expects an orderly transition period before full implementation.
The committee did not take final action on the transformation legislation during the hearing; lawmakers requested continued technical work and directed staff to circulate materials and revisions for follow-up consideration.
