INDIANAPOLIS (January 11, 2005) - Governor Mitch Daniels took swift action today to reform the way the state offers services to the state's children by signing an executive order that creates the Department of Child Services.

The governor also rescinded executive orders that established collective bargaining and resultant union settlements for about 25,000 state employees and replaced them with an order that will provide those employees with access to a complaint and hearing procedure for contested disciplinary actions. Most will be extended the protections of the State Employee Appeals Commission (SEAC). SEAC is an independent panel of five citizens who hear grievances pertaining to job security and pay issues.

The governor said that employees who elect union representation may continue union representation in the SEAC hearing process; payroll deductions for union dues will continue to be honored; and the head of the department of personnel will meet with unions and any organization with significant employee membership quarterly to listen to concerns and hear their ideas on improving services.

"I could not make today's changes to protect Hoosier children with the previous collective bargaining agreements in place," Daniels said. "I told state employees in my introductory letter yesterday that I value and believe in them, and I asked them to help me raise the standards of performance in government. Earlier today, I met personally with union leaders to inform them of my decision and to reaffirm my commitment to provide due process guarantees to employees.

"Our personnel laws and systems should meet three tests: to protect employees against unfair personnel practices or decisions; to enable employees to express their opinions about the terms and conditions of their employment; and to enable state government to reform itself and to change as necessary to protect taxpayers and meet changing public needs," said Daniels. "Our current system completely fails the third test, so we are replacing it with new arrangements that expand workers' freedoms while better serving the public interest."

The Department of Child Services, a new cabinet level agency, is headed by former Marion County Juvenile Court Judge James W. Payne. It moves Child Protection Services, foster care, adoption, independent living, and the Child Support Bureau from the Family and Social Services Administration (FSSA), now led by Mitchell Roob. All Division of Family and Children programs or services that are not being transferred to the Department of Child Services, including such areas as child care licensing and public assistance, will remain at FSSA.

"We are committed to more fundamental protection of kids and stringent enforcement of child support laws. We need significant improvement in these areas, and we need them quickly," said Payne.

According to the collective bargaining arrangements established under the previous executive orders, Governor Daniels could not have created the Department of Child Services in the manner he did today. With previous collective bargaining agreements, the state was required to notify and meet with unions 30 days in advance of any major department reorganization.

In addition, the governor could not have moved the staff and resources of the Indiana Commission on Community Service and Volunteerism and FaithWorks Indiana into the new Office of Faith-Based and Community Initiatives. He also could not have transferred the functions and services of the Division of Information Technology to the oversight of the state's new Office of Technology, putting those services in a single office of state government. The governor also signed those executive orders today.

Rescission of the collective bargaining agreements also opens the opportunity for Governor Daniels to explore such items as pay for performance and to deploy and transfer employees where they are needed in a more expedient manner.

"This action frees state government to do other things. Taxpayers paid for 100,000 hours of time last year that was not devoted to public service. Numerous other hours have been consumed in unproductive meetings and procedures required by the settlement agreements, and much of the slowness of state government traces to the agreement," the governor said. "We can provide more freedom and more protection to state workers and at the same time, free government from the paralysis of this system."