I wrote a column this week about what’s known so far about Gov. Asa Hutchinson‘s plans to “transform government” by combining state agencies into fewer departments answering to the governor. Now comes a state employee with more insight on possible motivation.

I’m a skeptic of the notion that fewer agencies automatically will mean more efficient and cheaper government. Past combinations have proved unwieldy to unworkable (think Department of Human Services). The basic need for the various services won’t go away. Bigger bosses will mean bigger administrative expenses in some cases. Any budget slashing most likely will occur at the level where state employees meet people in need of services.


An anonymous state employee added another view of government combinations, particularly about the roll-up of 24 agencies proposed by Insurance Commissioner Allen Kerr, which I excerpt here:

1. There are two types of funding for State agencies. Line Item (LI), which comes from tax revenue and cash fund (CF), which comes from the license holders license fees. The agencies like Towing and Recovery get their operating budget from the folks that pay for licenses to do business in Arkansas. Any money not spent by the agency by the end of the year goes into their Cash Fund Account (CFA). The CFA is not mixed with tax revenue and remains the property of the respective board. The board of the agency controls the money. All State agencies that are Cash Fund have at least 2+ years of operating budget tied up in their CFA Account. The Governor has been looking for ways to free up that money which is currently many millions of dollars so that he can feed it to LI agencies. The unspoken rule is anyone with over one year of budget in CFA is targeted for consolidation so the funds can be accessed.

2. Some agencies are looking for ways to spend their CFA down so they won’t be targeted by the consolidation team to move somewhere.

3. The agencies that have consolidated counterparts in other states complaint all the time about how hard it is to get documentation on licensees from other states. They can’t talk to anyone familiar with the licensees because every call goes to a generic call center. The licensees transferring in tell horror stories about waiting months to get licensed.

This whole thing will be a mess. Prices are already going up and service will drop. 

So add those thoughts to the discussion. This touches on a persistent problem in Arkansas government. We overregulate through multiple licensing agencies — not so much to protect consumers as to protect the influential in the various industries. But the fix for that — if indeed it needs fixing — is to take on the regulatory structures, not simply to pilfer their cash funds.