$280,000 salary at DHS has lawmakers talking

Arkansas' House and Senate leaders support Gov. Asa Hutchinson's plan to boost the salary of the state Department of Human Services' director from $162,647 to $280,000 to attract a former health care adviser to former Massachusetts Gov. Mitt Romney to the job.

However, other lawmakers want more information before passing judgment on the Republican governor's plan to raise the salary of the director of state government's largest agency by nearly $120,000 a year.

Both Senate President Pro Tempore Jonathan Dismang, R-Searcy, and House Speaker Jeremy Gillam, R-Judsonia, said the salary level is commensurate with Cindy Gillespie's experience and the responsibilities she would take on as the department director.

"Quality costs, and that's what I have been taught in life, and [the salary] is appropriate," Gillam said Friday.

Dismang said that departing Director John Selig, who is making $162,647 a year, is underpaid.

A Joint Budget Committee co-chairman, Sen. Larry Teague, D-Nashville, said, "It's fair to say I don't particularly like" Gillespie's starting salary.

"That says she is worth $120,000 more than [Selig] was," he said.

Teague added, "Maybe she is really good and she'll save more than that."

The other Joint Budget Committee co-chairman, Rep. Lane Jean, R-Magnolia, said the salary "is a little high.

"But I am waiting for the explanation," Jean said.

Hutchinson announced Wednesday the hiring of Gillespie to replace Selig, effective March 1. Gillespie is a principal in the Washington, D.C., office of Dentons' Public Policy and Regulation practice and a leader of the firm's Health Policy and Health Insurance Exchange Teams, Hutchinson's office said. The Dentons' firm offers consulting services to companies regarding public policy and regulation.

Romney, the 2012 Republican presidential nominee, described Gillespie as a conservative Democrat in his 2004 book.

The state Department of Human Services has an $8 billion budget and more than 7,000 employees in the current fiscal year.

The department's total operating expenses were $7.1 billion, including $5.1 billion in federal funds and $1.2 billion in state general revenue, and $719 million in other funds, in fiscal 2015, according to the state Department of Finance and Administration.

The department provides aging and adult services; behavioral health services; child care and early childhood education; children and family services; community service and nonprofit support; county operations; developmental disabilities services; medical services; services for the blind; and youth services.

The governor plans to have a sole-source contract with Gillespie at the same pay rate as her $280,000 salary until the Legislature makes the necessary changes to approve the higher pay, Hutchinson spokesman J.R. Davis said Wednesday. The Legislature will meet in a fiscal session starting April 13.

The salary would make Gillespie the highest-paid state agency director.

Numerous higher-education employees, including football and basketball coaches, University of Arkansas for Medical Sciences doctors and some higher-education chiefs earn more than $280,000 a year.

Davis said Friday that Gillespie will be taking a "a drastic [pay cut]" to serve as the department's director, but he didn't have exact figures.

He said that all of the leading candidates Hutchinson "was looking at were employed in positions that paid similar salaries.

"In addition, the Pace Group, who led the search for the new DHS director, did considerable work on salary comparisons prior to beginning the search -- all of which validated the need for this salary range," Davis said in a written statement.

"Their original salary review for comparable positions indicated that to be competitive in attracting an individual that met the criteria of the needs analysis, the salary would be in the range that was offered to Cindy," he said.

Sen. Bart Hester, R-Cave Springs, who is co-chairman of the Legislature's personnel subcommittee, said the $280,000 for Gillespie is "probably not enough."

"We spend tens of millions [of dollars] on consultants," and he's looking forward to the first consulting contract that the department won't need because Gillespie is the department's director, Hester said.

"It will show paying an increased salary was worth it," he said.

Senate Public Health and Welfare Committee Chairman Cecile Bledsoe, R-Rogers, said she believes that Gillespie is "a conservative.

"With her national reputation as a problem solver, she will be worth every dime," said Bledsoe. "I believe she will earn every dime of that money because she is going to an agency that needs reform and needs reform now."

Rep. John Payton, R-Wilburn, said Friday that Gillespie's salary is "much higher than I expected to be for that position."

But, he added, "I don't think I have all the information to be confident in" his opinion about the salary level.

"It's going to take a lot of convincing to get me to approve anything like that," said Sen. Bryan King, R-Green Forest. "It is just too large and too big of an agency to have one director." King said the department should be broken up into several agencies.

Selig played a role in the development of the state's private-option program, which uses federal Medicaid dollars to purchase private health insurance for some low-income Arkansans.

Hutchinson wants to overhaul the private option and rename it Arkansas Works.

He is negotiating with U.S. Department of Health and Human Services officials to find out what changes they would allow under federal law.

Hutchinson said Thursday that "Cindy is a dynamo when it comes to health care reform.

"She brings great management experience, business acumen, as well as a passion for kids. That's what we need as a leader in DHS," he told economic developers Thursday in Little Rock.

"And she not only has been Gov. Mitt Romney's health care adviser and his national health care adviser, but also she was one of the key officials to manage the Salt Lake City Olympics and to bring it from disaster to success," Hutchinson said.

Romney praised Gillespie throughout Turnaround, his 2004 book on the Salt Lake City Olympics. When Romney took over the organizing committee, the Olympics had a financial shortfall; in the end, the organization ended with a surplus.

Before her government service in Massachusetts, Gillespie served as a senior executive for the nonprofit Salt Lake Olympic Committee, responsible for hosting the 2002 Olympic Winter Games, and as a director at the Atlanta Committee for the Olympic Games, the nonprofit hosting the 1996 games in Atlanta, Hutchinson's office said.

Gillespie is a graduate of Trevecca Nazarene College in Nashville, Tenn., and has a master's degree from Auburn University in Alabama. She is a native of Columbus, Ga.

At one point in his book, Romney called her a "longtime Democrat," albeit a conservative one.

"Watching her interact with Washington officials, I had come to highly regard her political savvy," Romney wrote in his book. "While she was a longtime Democrat, she hailed from the Scoop Jackson wing of her party, closer to many Republicans than to the Ted Kennedy extremity."

Davis, Hutchinson's spokesman, noted that Gillespie campaigned for Romney, contributed to Republicans and worked in a conservative administration for more than a decade.

Hutchinson said Friday that political affiliation was not a factor in hiring.

"I'm a conservative, and I govern with that approach, but I don't know Cindy's party affiliation. It was not a factor in her hiring -- nor has it been with other director appointments," he said in a written statement.

"I want the best people for any job in Arkansas state government, and Cindy is -- as noted by her former employer, Republican Gov. Mitt Romney -- one of the best at what she does. She will be an excellent resource to our state, and I am delighted to have her on board."

A Section on 02/06/2016

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