State News

Perdue: Merge state departments, freeze hiring

Posted December 9, 2010 5:41 a.m. EST
Updated December 9, 2010 6:28 p.m. EST

— Gov. Beverly Perdue said Thursday she wants to consolidate several state agencies, eliminate support functions and freeze hiring to streamline state government and save money.

"I believe North Carolina has to be leaner and more nimble and more responsive to the citizens of this state," Perdue told area business leaders during a meeting at Pinehurst Resort. "It's not rocket science. It's just simple, fundamental, good business sense."

The state faces a $3.7 billion budget shortfall, starting July 1, according to the most recent estimation by fiscal experts at the legislature. That's nearly 20 percent of the $19 billion budget under which the state is currently operating.

Most of the gap is caused by the loss of federal stimulus dollars and the expiration of temporary taxes, along with high-priority spending items that lawmakers usually approve, such as funding increased school enrollment, state pension funds and the employee health insurance plan.

The shortfall could change if the economy improves or worsens.

The new Republican majority in the General Assembly has ruled out new taxes to close the budget gap, so more attention has been paid to possible consolidation or reorganization of state government as a budget solution.

Perdue said she wants to merge state agencies and privatize some of the duties now handled by state workers.

Under her plan, the departments of Juvenile Justice, Correction and Crime Control and Public Safety would merge into one Department of Public Safety; the Department of Commerce would absorb the Employment Security Commission; and the Department of Administration would be renamed the Department of Management and Administration and become the chief operations unit for state government, absorbing information technology, the Office of State Personnel and the controller’s office.

Purchasing functions can be consolidated and coordinated bidding and bulk purchasing would be farmed out to a private company, Perdue said. Also, up to 100 computer service units statewide could be closed, and a private company could help the state consolidate IT services in a central location, she said.

The governor declined to say Thursday how much money the moves could save or how many state jobs would be eliminated by farming out functions like human resources, purchasing and IT. The details would be included in her 2011-12 budget proposal, she said.

"I know I'm not giving all the details. The devil's in the details, and those details will be excruciatingly painful," she said. "There will be layoffs. I'm not proud of saying it. I'm very worried about it."

She also called for an immediate hiring freeze in all cabinet agencies and asked other members of the Council of State to do likewise in their departments.

Finally, Perdue said she would present to lawmakers a list of 150 state boards and commissions that could be eliminated. Lawmakers should review each and retain only those that are justifiably needed, she said, noting that more than half of the existing state boards and commissions receive state funding.

"If we're going to reinvent this thing called state government, we simply can't do things the old way," she said. "It's really time to stop talking the talk and do something to fundamentally change the structure of this great state."

The last state government reorganization occurred in 1996. The last significant attempt to consolidate government departments failed in 1995 when Republicans balked at Gov. Jim Hunt's proposal to eliminate the Department of Crime Control and Public Safety.

Leading Republican lawmakers, including incoming House Speaker Thom Tillis, said they met with Perdue Thursday morning to discuss her plan, and they support the idea of streamlining state government.