In this session’s search for cost savings, lawmakers have debated everything from eliminating agencies to charging state employees who park in state garages. But until recently, one promising idea has been practically absent from the conversation-a hiring freeze.

The concept, laid out in House Bill 4, is fairly simple one. Unless absolutely necessary, state agencies would be required to delay hiring any new employees for the near future and would be prevented from diverting those funds to other uses-such as boosting salaries, wages, and benefits of other workers. And yet, in spite of its simplicity, a hiring freeze has the potential to generate some big savings, as seen below with some back-of-the-napkin calculations.

Based on the LBB’s budget summary for CSHB 1, the total number of full-time equivalent (FTE) positions provided for in the proposed budget for fiscal year 2012 amounts to 233,699. Using this figure as our starting point, and after making certain assumptions, we can estimate a minimum cost savings figure.

Let’s assume that-for reasons of public safety or political expediency-all of the FTEs in Article II: Health and Human Services (56,727), the Department of Public Safety (8,152), the Texas Department of Transportation (12,203), and the Texas Department of Criminal Justice (39,935) are off-limits. Based on this reasoning, the total number of FTEs subject to this amendment is reduced to 116,682 for the purposes of this exercise.

Next, we need to subtract the total number of higher education employees included in our total because, as we’ll see below, the amendment does not apply to them.

As defined in Section 317.001 of the Government Code, the term “state agency” does not include institutions of higher education-it is limited to only those entities in the executive, judicial, or legislative branches of state government. Using employment data from the State Auditor’s Office (SAO), we can determine that there were 157,726 FTEs in institutions of higher education for FY 2010, of which, only 50.9 percent of these were paid for by appropriated funds. Assuming the same level of higher education FTEs for FY 2012, the total number of FTEs that the hiring freeze would apply to is reduced by 80,282, leaving us with a total of 36,400 FTEs.

Now, using the SAO’s FY 2010 salary estimate, we can say that the average classified, regular FTE salary for the most recently completed year was $39,265. Assuming a 10% attrition rate for 2012 and 2013, we can then calculate an estimate:

3,640 (10% attrition in frozen FTE’s)X $39,265 (average annual salary per FTE)$142,924,600 (approximate savings in FY 2012)

3,276 (10% attrition in frozen FTE’s)X $39,265 (average annual salary per FTE)$128,632,140 (approximate savings in FY 2013)

$271,556,740 estimated savings for 2012-13 biennium

And that is without firing a single person.

-James Quintero