As Bobby Jindal prepared for his 2008 inauguration as governor, state government workers numbered about 93,500.
Today, that workforce hovers at 62,000 employees — fewer than it’s been in more than two decades. Spending on payroll has decreased by about $1 billion annually.
At the Louisiana State Employees Retirement System, retirees now exceed the number of active employee members — another consequence of the downsizing.
As planning begins for the next budget year, Commissioner of Administration Kristy Nichols said there are no plans for any new major reductions. “Obviously, we will be looking for ongoing efficiencies,” she said.
“We really believe that we have reached a sustainable level of employees,” Nichols said, adding that the workforce is “capable and efficient” across the state.
The shrinking of the state government workforce by one-third stems largely from Jindal’s privatization of many government functions and facilities, most notably in the health care arena.
The biggest hit to state employment ranks — about 7,000 jobs — came as LSU turned over the management of nine of its 10 charity hospitals to private managers, a process that wrapped up during the last budget year.
The privatization push — part of Jindal’s political agenda — started early on, and the pace picked up in his second term in office.
Reorganization of department operations has eliminated many jobs during the Jindal years, as did consolidation of agency procurement and information technology operations within the governor’s management arm, the Division of Administration.
For instance, the Office of Motor Vehicles has fewer staffers to help with driver’s licenses, renewals and the like. The Department of Children and Family Services has lost many of its employees in local communities.
“It’s certainly meant that the footprint of government employment has definitely changed,” state Civil Service Director Shannon Templet said. “We are still doing the same work, but in a different, streamlined way.”
Templet’s agency oversees classified employees, the rank-and-file employees who have job protection from political firings. The remainder of the workforce is “unclassified” and subject to hiring and firing at will.
During Jindal’s tenure, the number of classified employees has decreased by 34 percent, down nearly 22,000. The unclassified ranks decreased by 21 percent, or about 8,000.
The average salary of classified workers is about $20,000 a year less than those who are unclassified and whose ranks include the heads of state agencies and college professors.
The Civil Service Commission approved the contracts outsourcing jobs that were traditionally held by classified state employees. Its sole role was to determine if the contracts were entered into for reasons of “efficiency and economy and not for politically motivated reasons,” according to state law. Jindal officials promised that most of the displaced classified employees would have a chance to work for the private contractors.
“The commission had wanted us to see how many people would be hired by the companies that took over providing the services,” Templet said. “We were not able to track that. It’s not a public record.”
Templet also noted that Civil Service has no way of monitoring the performance of those companies. “We take it on good faith that those services will be provided,” he said.
Nichols said deals with private contractors are proving successful and “quality services” are being provided as taxpayer savings continue to grow.
She said the transfer of LSU hospitals to private management increased access to care for the poor and uninsured while expenses came in $50 million under budget last fiscal year. She also cited savings of $35 million from the private takeover and consolidation of some state facilities for the mentally ill and developmentally disabled, along with savings of $16 million over three years from letting a private company handle claims management and loss prevention services for the state. She also mentioned having private insurers take over care management for Medicaid recipients, though she gave no dollar amount for savings from that move.
Legislative Auditor Daryl Purpera said it would be “a massive, massive project” to undertake a full-blown review of Jindal’s privatization initiatives and government downsizing.
“Are the same services being delivered?” he asked. “Is there a savings, or did we just redirect into professional services costs? You would have to analyze. A lot of times you can’t quantify.”
Purpera said it’s important to keep a close eye on the private operators to make sure they are meeting contract terms. A recent review of mental health privatization found the contractor’s computer system did not allow regional human services districts to bill third-party claims.
“They failed to collect and had to cut personnel, so they were able to offer fewer services,” he said.
A big question in all initiatives involves the starting point for comparisons, he said.
Purpera said a Department of Health and Hospitals report that legislators ordered to help evaluate Medicaid privatization contained errors and relied on information provided by the insurance companies. He warned legislators that the DHH report had math errors and made unsubstantiated claims of program success.
DHH Secretary Kathy Kliebert said the report was responsive to the Legislature’s request, but she promised a better “transparency” report next year and said an independent party has been hired to review data supplied by insurance companies.
The Public Affairs Research Council of Louisiana, like the auditor’s office, has explored certain aspects of privatization.
“They are all different,” said Robert Travis Scott, president of PAR.
Many of the big changes have not been in place long enough to tell whether expectations are being fulfilled, he said.
PAR, a governmental research group, continues to closely monitor the LSU hospital privatizations.
PAR has long urged LSU to get out of the hospital management business and focus more on medical education, Scott said. PAR also saw the benefit of having private partners invest money into hospital projects, he said.
One question, he said, is whether patients are “being taken care of more quickly and in a better way.”
Another centers on money, Scott noted.
“The finances of this long-term just isn’t solid,” he said. “There are really large questions going to be out there whether this saves the state money.”
Scott said a lot of cost-shifting is occurring. In some cities, hospitals that aren’t involved in the privatization agreements are seeing more uninsured patients as a result of the changes, he said. While LSU partners are reimbursed, nonpartner community hospitals don’t get money for uninsured patients, putting stress on their finances, he said.
Scott noted that such pressure prompted the Jindal administration to promise Baton Rouge General Medical Center MidCity — which isn’t an LSU partner — about $17 million to keep it from closing its emergency room — another cost that must be calculated in figuring what it takes to support the overall system.
“I don’t think it’s at all a slam-shut case that privatization is demonstrating savings,” Scott said.
But, he added, “The old system would have cost more, too.”