Officials Vague on Agency Merger Savings

February 3, 2011

Investigative Reports

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The NerveAlthough S.C. lawmakers have introduced a slew of bills to consolidate state agencies, no one seems to know exactly how much those moves would save taxpayers.

In fact, the Office of State Budget, which prepares fiscal impact statements on bills, punted on trying to determine the savings of making  the Department of Probation, Parole and Pardon Services a part of the Department of Corrections (H. 3267), and putting the Department of Public Safety under the State Law Enforcement Division (H. 3268).

“Although enactment of this bill should result in future savings, neither agency is able to estimate the amount of such savings or determine how long it would take for such savings to materialize at this time,”  Harry Bell, assistant director of the Office of State Budget, wrote on Jan. 18 about the proposed DPS-SLED merger.

As for combining the probation and corrections departments, Bell wrote on Jan. 6 that the Department of Corrections “indicates that without a detailed analysis of staffing levels, fixed costs and functional requirements, it is premature to place an estimate on potential future cost savings which may take several years to materialize.”

Rep. Murrell Smith, R-Sumter and a member of the budget-writing House Ways and Means Committee, told The Nerve recently that the lack of specifics is frustrating to the committee.

“I don’t think ‘we don’t know’ is going to be appropriate,” said Smith, who co-sponsored the bill to merge the departments of corrections and probation.

“I’ve been baffled by that as well,” said Rep. Bakari Sellers, D-Bamberg and sponsor of the two consolidation bills, when contacted recently by The Nerve. “We’ve had a great deal of difficulty in getting that information.”

Asked why the Office of State Budget cannot provide cost-savings estimates on the proposed mergers, Delbert Singleton, spokesman for the S.C. Budget and Control Board, which oversees the budget office, said Tuesday in a written response, “The Budget Office has indicated that they have provided as much information as possible given the information they have concerning the bills.”

The issue is important, as lawmakers this session are grappling with filling an unprecedented 2011-12 budget hole projected to be more than $800 million.

In her State of the State speech last month, Gov. Nikki Haley said there would an “immediate savings” of “approximately $6 million in administrative costs alone” by reforming the state’s prison system, though she didn’t give specifics on how the initial savings would be realized.

Haley didn’t say in her speech whether she supported combining SLED and DPS, though she reiterated her support for creating a Department of Administration, which, as proposed, would put many functions of the Budget and Control Board under the governor’s direct control.

The 1,000-employee BCB, which handles many daily administrative functions of state government, is controlled by a five-member board made up of the governor, state treasurer and comptroller general, and chairmen of the House Ways and Means and Senate Finance committees.

The Nerve recently sent written questions to Haley spokesman Rob Godfrey about Haley’s views on combining specific agencies, including SLED, DPS, Corrections and PPP, as well as specifics on the potential cost savings, but received no response.

In a letter and two-page handout given to lawmakers on Tuesday, Bill Byars, the outgoing director of the state Department of Juvenile Justice and Haley’s nominee for director of the Department of Corrections, said DJJ experienced a 38 percent reduction in the recidivism rate among juvenile offenders through reforms instituted during his tenure, despite a roughly 29 percent cut in the department’s general fund budget since July 1, 2008.

“Governor Haley has made it clear to her corrections cabinet that her priority is one of extending the juvenile justice reform movement to the adult side,” Byars wrote in his letter, noting that merging the probation and corrections departments “into a single administrative entity is a necessary precedent in order for us to follow a parallel track.”

“This merger would enable the newly formed agency to dedicate resources to evidence-based programs which have proven so effective at DJJ in lowering the re-incarceration rate,” Byars wrote, though he didn’t offer specifics on cost savings on the proposed merger.

Rep. Smith told The Nerve that there “obviously will be cost savings with administrative overhead” by combining the probation and corrections departments, though he said he didn’t have specific figures.

An attorney, Smith said merging the agencies would help accomplish the goals of the state’s sentencing reform law, which, passed last year, aims at keeping more violent offenders behind bars while offering alternative sentencing options to non-violent offenders  to reduce the number of incarcerated offenders and thereby lower prison costs.

“The bigger issue with triple P and Corrections is that they need to work hand-in-hand with each other,” Smith said.

Probation department spokesman Pete O’Boyle referred The Nerve’s questions to Haley’s office, saying in a written response, “It is their policy and their purview.”

Another bill (H. 3469) to merge the probation and corrections departments was introduced last week by Rep. Mike Pitts, R-Laurens.

As for the proposal to move DPS to the State Law Enforcement Division, DPS spokesman Sid Gaulden in a written response last week to The Nerve said his agency “does not comment on pending legislation.”

Law enforcement agencies aren’t the only departments being looked at for consolidation. Rep. Brian White, R-Anderson, for example, last week introduced a bill (H. 3421) proposing to move the Department of Alcohol and Other Drug Abuse Services under the Department of Mental Health.

Rep. Kris Crawford, R-Florence, recently introduced a bill (H. 3379) that would eliminate the five-member Budget and Control Board’s governing board and bring the agency under the governor’s control. Another Crawford bill (H. 3377) would put the state Department of Vocational Rehabilitation under the S.C. Department of Employment and Workforce.

“Why do we have two agencies to get people to work?” Crawford, a physician, said when contacted byThe Nerve about his proposal to move the Department of Vocational Rehabilitation to the Department of Employment and Workforce.

In a written response to The Nerve, Mark Wade, spokesman for the Department of Vocational Rehabilitation, said, “In general, we would strongly favor retaining our current status as an independent agency, feeling that it is in the best interest of South Carolinians with disabilities to be served by an agency dedicated entirely to the provision of specialized services, as opposed to an agency with a primary focus on meeting the needs of the general population.”

Wade said his agency is “unsure how saving would be realized from a consolidation,” noting that according to the latest national review of vocational rehabilitation agencies, South Carolina’s is the sixth lowest in the country and the second lowest in the Southeast in terms of “administrative cost percentage.”

Adrienne Fairwell, spokeswoman for the Department of Employment and Workforce, said her agency “doesn’t have any position” on Crawford’s bill, noting, “We haven’t done any research on whether there would be any cost savings.”

Crawford said while he believes there eventually would be cost savings by merging the agencies, that wasn’t his only reason for introducing his consolidation bills. He said, for example, that lawmakers often have used state budget provisos to move money between agencies; combining certain agencies would give agency directors greater spending flexibility, he contends.

Crawford said his bills would promote “better organization of state government and better flexibility of dollars when times get tight.” He added that in the coming weeks he intends to introduce “a whole set of bills that merge a lot of agencies together.”

Reach Brundrett at (803) 254-4411 or rick@thenerve.org.