Perdue, GOP Agree On Slimmer State Payroll

Dec 10, 2010

Gov. Perdue
Credit Laura Leslie

Incoming Republican leaders are applauding a new plan by Governor Bev Perdue to streamline state government, cut state jobs, and save millions of dollars.

Governor Perdue rolled out her plan yesterday before a group of business leaders in Pinehurst. Perdue is proposing to consolidate the fourteen state agencies under her office into eight. Juvenile Justice, Corrections, and Crime Control and Public Safety would become one Department of Public Safety. The Employment Security Commission would move under Commerce. The State Controller would join the State Personnel office in the Department of Administration.  Duplicative functions and personnel would be eliminated:

"We’ll save tens of millions - and in some cases hundreds of millions of dollars - as we do things differently and trim government’s rosters."

Perdue will need legislative approval for the realignments. But she’s already moving ahead on another task – eliminating back office functions.  She says IT services, purchasing, human resources, training, and administration will all soon be centralized and outsourced to private sector contractors, who she says can provide the same support for less cost:

"We have in state government now - that we can count – 377 human resources positions, not including the 60 or so we have in the Office of State Personnel. We have 703 financial management positions. And we have 149 folks who do nothing but purchase. Y’all, that’s a lot of big salaries."

Perdue says the changes are needed because of a projected $3.7B shortfall in next year’s budget. She says the state has to find the money to protect its core functions -- education and job creation.  Everything else is on the table.  For the last two years, she’s used one-time solutions to fill in the gaps -- reversions, trust funds, furloughs, stimulus money.  But she says that’s not a sustainable strategy – especially if recovery takes years or even decades:

"The fact of the matter is we can no longer wait. It’s not gonna get rosy again. We have to fundamentally restructure, reset what we’re doing to fund the core priorities. And that’s what I’m about to try to do."

Perdue also announced a state hiring freeze for all but the most critical personnel. And she’s asking lawmakers to do away with boards and commissions that no longer serve a public need.  The new Republican legislative leadership welcomed all her ideas with open arms. The likely next Speaker of the House, Thom Tillis, says the outsourcing plan just makes sense:

"And I think streamlining the operations as a whole, going from 14 to 8, all make great sense. They’re things we’ve supported for a while, and to be fair to the governor, they’re things the governor’s wanted to do for a while, and hasn’t had the support from the General Assembly."

The changes the governor wants would potentially cut more than a thousand jobs from the state payroll. Perdue says she’s worried about adding to the state’s unemployment problems. But likely next Senate Leader Phil Berger says many of those jobs won’t really go away:

"You know, when you eliminate that position in the public sector, and what you’re doing is you’re contracting it out, then in essence you’ve created a position in the private sector. At least conceivably, you have. So I think that the net of that is probably negligible."

Perdue says her proposed changes are just the beginning. She says more streamlining and more cuts are on the way – in all departments and agencies across the board. She says her staff is evaluating the effectiveness of every state program launched in the past 20 years. Whatever isn’t working will go.  That probably won’t win her many friends among state workers. But Tillis says it’s necessary:

"We’re in a very uncomfortable time in North Carolina, and everything has to be on the table. And I really give the governor a lot of credit for going forward and definitely pushing people that she’s worked with out of their comfort zone to try to come up with the right strategy for North Carolina."

Perdue didn’t offer a lot of details yesterday.  She says all the numbers will be included in the 2011 budget proposal she’ll issue early next year. But some cuts may not wait till the next budget.  Perdue says she’d like more power than she has now to manage the current budget, to pull back what spending she can to provide some padding for next year.  Berger says Republicans are likely to accommodate her.