Reorganization of Iowa’s state government signed into law by Gov. Reynolds

DES MOINES — A massive reorganization of the executive branch of state government, proposed by Gov. Kim Reynolds and informed by a consulting firm, was signed into law Tuesday.

Reynolds signed into law the nearly 1,600-page bill, Senate File 514, which reduces the number of cabinet-level state agencies from 37 to 16 and eliminates scores of vacant state government jobs.

Reynolds and supporters of the realignment note that Iowa’s state government has not undergone a structural review in roughly 40 years and said the proposal will make state government more efficient in its operations and services to Iowans.

“Not only will Iowans receive better services through alignment, they’ll get it at lower cost,” Reynolds pledged during a bill-signing ceremony Tuesday in the governor’s formal office at the Iowa Capitol. “As elected leaders, it’s our responsibility to ensure that the services we provide are delivering value to those that we serve. And this transformative, comprehensive bill will do exactly that.”

Critics have asserted that it places too much authority with the governor and have described it as a “power grab” by Reynolds.

As a result of the changes, more state agency leaders now will be appointed by the governor and subject to Iowa Senate confirmation, rather than being elected by colleagues on state boards or commissions.

The governor also will have more leeway to pay directors higher salaries — eliminating the need to exceed previous salary caps by paying bonuses instead — which Reynolds has said is needed to recruit and retain top talent.

“Under this new law, the governor will have more control over once-independent offices and agencies, with fewer checks and balances. She’ll have more power to appoint friends and cronies, with no limits on sweetheart salaries for them,” Iowa Senate Minority Leader Zach Wahls, of Coralville, said in a statement. “House and Senate Republicans refused to fully vet this bill or exercise any oversight on the governor’s office. Now it’s law, and Iowans will be living with the consequences for decades to come.”

The proposal passed the Iowa Legislature with only Republican support. All Democrats and a handful of Republicans opposed it.

The reorganization will result in a reduction of 205 full-time equivalent positions in the executive branch of state government, and will reduce state spending by $6.6 million, according to an analysis by the state’s nonpartisan Legislative Services Agency.

Those projections differ from figures put out by the governor’s office, which were informed by the consultants’ report. They say the realignment will eliminate 513 currently vacant executive branch positions, and will result in a $3 million reduction in state spending.

The governor’s office has said the reorganization will reduce the executive branch’s workforce by attrition, and that no state workers will be laid off because of the changes.

“(The proposal is about) ultimately streamlining services for Iowans and helping them get the answers that they need in a quicker, more efficient manner,” Reynolds told reporters after the bill-signing ceremony. “Then Iowans win, and that’s really what this is about: it’s about Iowans and providing them a better service.”

As examples of the many changes prescribed in the new law, the departments of commerce, banking, credit unions and insurance would be combined into a new Department of Insurance and Financial Services, and the cultural affairs department would be folded into the state administrative services agency.

The legislation also includes language that explicitly states that the state attorney general has the authority to prosecute cases without first consulting with the county attorney, and would give the state attorney general exclusive jurisdiction over elections-related cases.

While the language regarding the state attorney general’s authority restates current state law, the previous attorney general, Democrat Tom Miller, who served for four decades, by practice consulted with local county attorneys before involving the state office in legal matters. Some county attorneys expressed concern with the language in the new law, arguing it could lead to prosecution decisions that are more politically than legally motivated.

The Virginia-based consulting firm Guidehouse was paid nearly $1 million to analyze Iowa state government and make recommendations. Guidehouse was selected by the state under a competitively bid master agreement between the company and the state of New York, and Reynolds’ office used federal pandemic relief funds — which Reynolds criticized when they were approved by Congress — to pay for the consultant’s work.

Guidehouse produced a 68-page report that, including the reorganization measures, and also recommended the state sell off some land it owns near prisons and other state-owned facilities.

The consultant’s report also suggests that in the future the state should consider the privatization of some state entities as cost-saving measures. It lists as potential candidates for privatization Iowa PBS, the Iowa Communications Network, the State Historical Museum and the Volunteer Iowa program.

Neither the land sales nor the entity privatization are included in the legislation that was just signed into law.

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