Iowa Moves to Streamline State Government

Like all large organizations, state governments accumulate bureaucracy over time, making their operations more expensive and less responsive. To tame their bureaucracies, state governments require a periodic overhaul.

Iowa is accomplishing such a realignment, implementing the first major reorganization of the state’s government in four decades.

A group of consultants found the state has more than twice as many executive branch cabinet members as states with similar populations, including Arkansas, Mississippi, and Oklahoma. In fact, Iowa has three times as many cabinet members as neighboring Illinois, a state not known for efficient government. The consulting team recommended departmental consolidations that will make Iowa state government more manageable.

One set of suggestions that Iowa is now enacting is the merger of several state social service agencies into the Department of Health and Human Services. Not only does this reduce costs, it promises to give Iowans who require multiple social services a single point of contact.

Iowa is also consolidating a majority of its licensing activities into a single department, reducing complexity for workers trying to establish themselves in the state. This action builds on a 2020 reform that allows workers who hold comparable occupational licenses from other states to start serving Iowa clients without going through a new licensing process. Many other states have adopted or are considering Universal Licensing Recognition after it passed in Iowa.

The reorganization bill further reduces Iowa’s cabinet from 37 members to just 16, a number in line with both neighboring and comparably sized states. It also means that cabinet meetings may once again be held in the governor’s office rather than at a special facility.

While the new law will not result in layoffs, it does eliminate 513 unfilled full time equivalent positions at a savings of $12.6 million in the first year. And by reducing duplication within state government, more personnel savings should be possible in future years as employees leave and the state eliminates their positions.

Agency realignment is only the first of several measures Iowa must take to rein in the cost of state government. The independent consultant also recommended privatizing over 4000 acres of farmland adjacent to state prison facilities, reducing the amount of space occupied by state offices in Des Moines, consolidating common technology systems across departments, cooperatively procuring services with local governments, centralizing management of community‐​based correction services, and making changes to Medicaid program administration to unlock additional federal funding.

If all the consultant’s recommendations are implemented, Iowa could save $214 million over four years.

Now that state government has set an example of becoming more efficient, local governments should follow. Two‐​thirds of Iowa counties have fewer than 20,000 residents and may thus not be able to provide key government services in a cost‐​efficient manner. These smaller counties should contract with one another to provide services on a regional basis and look for other economies.

Private firms operating in a competitive marketplace are under constant pressure to reorganize, thereby using available staff more effectively. Now, as states compete for increasingly mobile citizens, it is time for them to get leaner and meaner as well. This is the lesson Iowa is now taking on board.