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Reform, reorganization best ways to gain large savings

In what promises to be a slow news week, the Baton Rouge Advocate ran a story about something in state government that was not anything new, but nevertheless interesting and worthwhile in the complicated public policy debate about force levels and classification of state government workers.

Those perusing the latest available (2007-08) annual report of the Department of State Civil Service will have noted that force levels overall did not change too much in the fiscal year 2004-2008 periods, but that a decrease of around 5,000 in the classified ranks was offset by a more than 5,000 increase in the unclassified service. Classified employees, after a six month probationary period, acquire job protections that vastly constrain agency abilities to discipline or to make workforce adjustments that would result in lower salaries for them, and which make it very difficult in an extended process to discharge them.

However, the article focuses on the unclassified workforce – those whose personnel matters are outside the hiring, disciplining, and firing regulations of the DSCS and are left up to the agencies that employ them. It notes this increase in the unclassified service and ponders about its implications. Unfortunately, the piece does not adequately capture the complexity of this argument, a necessary prerequisite as Louisiana looks to reduce its personnel costs by making its government more efficient as large budget deficits loom.

Regrettably, the article leaves the impression that the vast majority of the roughly one-third of the state’s full-time equivalent workforce in the unclassified service are presumed less “controllable” as objects of state spending policy and are at-will, if not political, appointees. However, it is decidedly not the case that more than a fraction of the unclassified service is comprised of positions whose existences, compensations, and hiring and firing positions are left mainly in the hands of elected officials and/or policy-makers.

Most of the unclassified service has performance pay plans in place – and often plans tying actual performance more closely to pay adjustments than presently in the classified service. For example, in higher education where the majority of these unclassified employees work, campuses years ago were directed to construct performance plans that assign numerical scores to various and mostly objective indicators, along with a few subjective ones, from which pay raises are calculated. In fact, campuses themselves determine whether raises are made and how, and with the fiscal situation such as it has been for the state for the past quarter-century these have been far and few between.

Contrast this with the procedure in the classified system, where the more-subjective evaluation process produces a five-tiered system where the same raise, until this year given annually, is given to anybody in the three higher tiers or well over 95 percent of the classified force. This may change, as the State Civil Service Commission in a couple of weeks will decide whether to change the present classified evaluation system to one that is actually closer to that often used in evaluating members of the unclassified service.

Also, in the instances of anyone who entered or laterally moved into the higher education system in a tenure-track position, these take on characteristics of the classified service. After, in essence, a much longer probationary period (usually six years; some actually come in with tenure and thus have no probationary period), they acquire protections similar to those in the classified service.

Finally, the reason why the proportion of about a third of the state’s employees are unclassified is because of two quirks tolerated in Louisiana, a higher education system that could use some more rationalization in organization and a charity hospital system run by a higher education system. The state’s head count (as opposed to FTE) number for the end of fiscal year 2009 shows almost half of the state’s employees are in higher education. (Some of this is overstated because, for example, part of that count will be students on work-study, adjunct instructors teaching a single course, etc.). But, given the large number of campuses (90) and five boards that oversee postsecondary education that may not do a lot to prevent inefficiency, ongoing cost-cutting deliberations may produce some retrenchment in almost all unclassified positions from this area.

Note as well that because higher education (the Louisiana State University System, specifically) has authority over the charity hospital system, the vast bulk of its employees are categorized here and are unclassified. Were the state do the sensible thing and get out of the hospital business except for a facility or two used for medical training (if even any are necessary), these jobs, most unclassified, would disappear from state rolls.

And if DSCS did look into the data to explain the changes in both areas of employment, it probably would find most of the downsizing in classified employee numbers has come from the aftereffects of the 2005 hurricane disasters, and subsequent reductions stressed by the Gov. Bobby Jindal Administration, partly out of budgetary concerns and partly out of ideology, and by other officials with power in this area (most notably Agriculture Commissioner Mike Strain), while the increase in unclassified employee tallies has come from the large amount of money pumped into higher education for several years until last year and unabated escalation of Medicaid costs and usage that have pumped up demand in the charity hospital system. It’s likely not as mysterious a development as DSCS officials seem to think.

Thus, the perception that the proportion is recklessly growing of the Louisiana state government workforce created and supervised at the whim of officials, and the allied thought that cost-cutting measures here would reap significant rewards, is unwarranted. Many more savings will emerge through mundane technocratic kinds of reorganization and reform of the present classified pay regime than by a scrubbing of unclassified positions where people are hired and fired at will.

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