TO: Dary Stone Mary Jane Maddox FROM: B. D. Daniel DATE: March 23, 1982 RE: STATE EMPLOYEE REDUCTION 4/0JAI The employee reduction figures utilized by the Governor reflect absolute employment figures and absolute reduction figures. From my perspective, a more meaningful statistic would reflect the relative size of state government and reductions in the number of state employees relative to population. For example, to compare absolute numbers of employees in two different states with different populations would be meaningless. It is almost as meaningless to compare absolute employment figures in Texas in 1978 with those in 1982, because Texas is now a different state. A statistic reflecting the relative size of state government is currently in widespread use. That statistic is the number of full-time-equivalent state employees per 10,000 population. The Census Bureau compiles this statistic, and it has been used for analysis by Comptroller Bullock (in his 1980 Financial Report) and the Legislative Budget Board (in a publication called "Fiscal Size Up" for the 1978-79 Biennium). Rounded off to round numbers, Texas had 100 state employees per 10,000 population in 1970. When Governor Clements took office, Texas had 127 per 10,000. During the first eight years of the decade, therefore, the relative size of state government increased by over 25% because the absolute size increased by over 50%. Governor Clements' efforts to reduce the absolute size of state employment have succeeded in halting its growth and resulted in a slight decrease in the absolute number of employees. But the relative size of state government has dropped significantly, from 127 employees per 10,000 population in 1978 to about 118 in 1980. By summer 1982, there will be only about 112 state employees per 10,000 population. If the Governor holds the line on state employment during his second term, by 1986 there will be about the same number of state employees per 10,000 population (103) as there were in 1970. I find these statistics compelling. WHAT DO YOU THINK?