The number of full-time state employees dropped by more than 1,600 last fiscal year to nearly 57,000, with much of the decline in human services and prisons agencies, according to Bureau of Legislative Research reports.
The 1,674-employee drop to 56,978 full-time employees in fiscal 2021 was the largest decline over a fiscal year since Act 110 of 1985 required agencies and higher education institutions to report employment. Fiscal 2021 started July 1, 2020, and ended June 30 of this year.
The largest previous decline was 754 employees in fiscal 2018, also under Republican Gov. Asa Hutchinson. He took office in January 2015. State employment has declined in the past four fiscal years.
The ranks of full-time state employees declined for the first time in fiscal 2011, by 71, and then again by the same amount in fiscal 2014 under then-Gov. Mike Beebe, a Democrat.
STATE AGENCIES
In fiscal 2021, the number of full-time employees at state agencies declined by 1,373, to 28,981, including a 1,443-employee drop at executive branch departments to 22,011, the Bureau of Legislative Research reports show.
The number of full-time employees at public two- and four-year colleges slipped by 301, to 27,997, in fiscal 2021, the Bureau of Legislative Research reports show.
"As a result of the long-term goal of transformation we continue to see employment in major departments lower than in previous fiscal years," Hutchinson said about executive branch agencies.
The goals of the transformation have been to improve services to Arkansans, improve management efficiency and save tax dollars by reducing the cost required to run state government, he said.
"However, we are challenged to fill key positions in a number of departments including [the Department of Human Services] and the Department of Corrections," the governor said last week in a written statement.
"State government is challenged just like private sector employers in being sufficiently staffed. It is an extremely competitive job market."
John Bridges, executive director of the Arkansas State Employees Association, said, "Given the recent minimum wage increase, offering signing bonuses, and the ability to adapt their budgets quickly, we are losing the lowest graded employees to the private sector and agencies are having a difficult time filling those positions.
"The turnover rate in these grades can be as high as 40% for some agencies," he said in a written statement.
Department of Transformation and Shared Services records show turnover was 19.4% in fiscal 2021, an increase from a range of 16.2% to 16.9% in the previous four fiscal years.
The average salary was $45,523 for the executive branch's employees at the start of fiscal 2022, up from $44,520 at the end of fiscal 2021, said Kay Barnhill, state personnel administrator.
At the start of fiscal 2022, state agencies were authorized to use up to 3% of their total salary expenses for merit raises for employees.
MORE TAX CUTS
These employment figures are disclosed in bureau reports computing the average of full-time state workers in the last quarter of each fiscal year.
Sometimes, state agencies and colleges make errors in their reports to the bureau on their numbers of full-time employees, but the bureau reports reveal broad trends in employee ranks.
Many state employees are in agencies under the direct control of the governor.
But some employees work for the state's other six constitutional officers, such as the attorney general and secretary of state; for the Legislature or the courts; for the agencies run by constitutionally separate entities such as the Game and Fish Commission and Highway Commission; and for higher education institutions that under Amendment 33 to the constitution have some independence from the governor, who appoints their boards of trustees.
"Over the last few years, we've demonstrated an ability to implement significant income tax cuts without negatively affecting state services," said Hutchinson, whose second four-year term ends in January 2023.
"This year to year decrease in employment is another example of my commitment to governing responsibly while also reducing the burden for taxpayers at every level of income," he said.
Hutchinson has discussed calling a special session to consider more income tax cuts, but the special session won't be set before Nov. 29, said Hutchinson's spokeswoman, Shealyn Sowers.
"An agreement has been reached with legislative leaders on an income tax package," and the state Department of Finance and Administration is calculating how much the plan will cost each year, Hutchinson said Thursday in a written statement. "Once we have those calculations, I will release the tax cut plan."
House Revenue and Taxation Committee Chairman Joe Jett, R-Success, and Senate President Pro Tempore Jimmy Hickey, R-Texarkana, said the proposed income tax cut package is projected to reduce state general revenue by roughly $500 million a year, after it's fully implemented.
The package includes:
• Reducing the state's top individual income tax rate from 5.9% to 4.9% and the top corporate tax rate from 5.9% to 5.3%. (The top corporate income tax rate will drop from 6.2% to 5.9% on Jan. 1 under a law enacted in 2019.)
• Consolidating low- and middle-income tax tables.
• Establishing a $60-per-filer low income tax credit.
• Adjusting the standard deduction by the consumer price index.
PAYROLL COSTS
State government's total salary and benefit costs totaled $4.222 billion in fiscal 2021, up from $4.219 billion in fiscal 2020, state Department of Finance and Administration reports show.
In fiscal 2021, state government's total salaries slipped to $3.248 billion from $3.257 billion in fiscal 2020, but total benefit costs increased to $974 million from $961 million in fiscal 2020, according to the finance department.
The total payroll and benefit costs for state agencies in fiscal 2021 dropped to $1.938 billion from $1.944 billion in fiscal 2020, the reports show.
The same costs for higher education institutions in fiscal 2021 increased to $2.283 billion from $2.274 billion in fiscal 2020, the reports show.
HUMAN SERVICES, CORRECTIONS
In fiscal 2021, full-time employees at the Department of Human Services declined to 6,502, from 7,021 in fiscal 2020, according to the Bureau of Legislative Research reports.
That included a drop from 2,021 in fiscal 2020 to 1,762 in fiscal 2021 in the Division of Developmental Disabilities Services, and from 1,728 in fiscal 2020 to 1,624 in fiscal 2021 in the Division of County Operations.
"The stresses related to the pandemic and general job market have really impacted us both in turnover and in hiring," said department spokeswoman Amy Webb.
"For [Developmental Disability Services], these are vacancies in our direct care staff, meaning those who provide care at the human development centers," she said.
"For [the Division of County Operations], these also are mostly field staff positions, meaning positions in our county offices," Webb said in a written statement. "We are implementing a number of things to try to recruit and retain employees."
The total of full-time employees in the Department of Corrections dropped from 5,369 in fiscal 2020 to 4,672 in fiscal 2021, according to bureau reports.
"The Department of Corrections did not plan to reduce the number of full-time employees," department spokeswoman Cindy Murphy said in a written statement.
"We are constantly working to fill vacant positions in this challenging economy," she said. "We recruit prospective employees using social media, hiring events, yard signs, billboards, radio and television ads."
"We understand that technology has made some positions obsolete, but we are concerned that employees who are in direct contact with clients such as living facilities and prisons are stressed to the point of a decline in quality of care, or put in danger if those positions are not getting filled," Bridges said.
"The same can be said if case workers are seeing a surge in their clients, that could lead to a slower response rate," he said.
The Legislative Council's personnel subcommittee recently approved an increase in the salaries of the five lowest grades, but new money was not approved to add to agency budgets, and some state agencies cannot adopt the new increases because of this restraint, Bridges said.
Alex Johnston, spokeswoman for the state Department of Transformation and Shared Services, said state departments may implement the salary increases for the five lowest grades to the extent that they have funds in their current budgets to support the increases.
The Legislative Council on Thursday directed its personnel subcommittee to review this matter.
HIGHER EDUCATION
The count of full-time employees at the University of Arkansas for Medical Sciences inched up from 10,986 to 11,076, while the ranks at the University of Arkansas, Fayetteville declined from 4,300 to 4,209, based on the Bureau of Legislative Research reports.
UAMS spokeswoman Leslie Taylor said in a written statement to the Arkansas Democrat-Gazette: "The numbers we have for these two years differ slightly from the report you have.
"We believe the difference may have been the inclusion of some part-time employees in their numbers," she said. "We show that at the end of FY2020, UAMS had 10,701 full-time employees. At the end of FY2021, UAMS had 10,671 full-time employees. The reason for the slight decrease in number can be attributed to the effects of COVID-19."
During the first surge of the pandemic, elective surgeries and other procedures that generate revenue had to be halted, and one of the steps UAMS took to avoid layoffs was a hiring pause, so open positions that weren't critical to the clinical enterprise were frozen for several weeks, Taylor said.
"Like other hospitals nationally, we have also seen a high turnover rate, about 23%," she said. "Some people are leaving health care altogether because of the pandemic. Others are taking positions elsewhere. There is a nursing shortage, for example, and some nurses are leaving hospitals and instead choosing to become travel nurses where the compensation is better."
Amy Schlesing, a spokeswoman for UA-Fayetteville, said, "The pandemic resulted in more job turnover at the university as it did across the nation.
"And at the same time, the university was under a hiring pause for most of FY21, which limited the ability to quickly fill some of those positions," she said in a written statement.
The number of full-time employees at Arkansas State University in Jonesboro increased in fiscal 2021 from 1,516 to 1,669 and at the University of Arkansas at Little Rock from 1,103 to 1,399. The numbers dipped at Arkansas Tech University in Russellville, from 1,131 to 1,035, and at the University of Central Arkansas in Conway, from 1,322 to 1,271.
UALR spokeswoman Angie Faller said, "Although the numbers reported are correct, UA Little Rock transitioned to a new Human Capital Management/HRIS system last year and has worked on data clean-up since the implementation.
"The average number of employees for the fourth quarter of 2021 was 1,183 employees," she said. "That actually leaves an increase of about 80 employees from fiscal year 2020, which was 1,103 employees."
Among two-year colleges, the full-time employee number at Northwest Arkansas Community College declined from 629 to 402 in fiscal 2021 and fell at UA-Pulaski Technical College from 461 to 419, the bureau reported.
Northwest Arkansas Community College said in a written statement, "After speaking with our HR staff, it appears that the 2020 figure you referenced includes part-time employees.
"NWACC had 407 full-time employees at the end of Fiscal 2020 and 402 full-time employees at the end of Fiscal 2021."
Pulaski Tech spokesman Tim Jones said there were eight provisional positions reported in the wrong category in fiscal 2020, so the correct quarterly average for fiscal 2020 should be 452, compared with 419 in fiscal 2021.