Commissioner Mark Costello brings business-friendly agenda to the Labor Department job

In his first run for public office, Mark Costello of Edmond easily defeated incumbent Commissioner of Labor Lloyd Fields in last November’s general election. As part of CapitolBeatOK’s continuing series of interviews with statewide elected officials, Costello answered a variety of questions last week.

Costello said the biggest surprise he faced upon taking office in January “was a negative one. Coming into the Department of Labor after being sworn into office, I found that over $110,300 in computer equipment was ordered in the closing days of the previous administration and had delivered just days before I took office. 

"The equipment was not in the budget and would have created budget problems; fortunately, I was able to order its return for a refund.”

As for pleasant surprises, “I received a very warm welcome from the employees and an equally warm welcome from the Division Directors.  I am impressed with the level of competence and continuity of the staff.”

Costello said his biggest disappointment since assuming office “was what I learned of the merit system during my Merit Protection Commission orientation.  I come from the private sector and if there is an employee that is not pulling their weight you can relieve him of his duties.  That is not the case with the public sector.

“I am working to correct that by encouraging legislation that would not offer merit status to an employee until the new hire completes three full years of employment. When one is hired by the state, it is the functional equivalent of a job for life.  Before being granted such status, I believe the employee needs to demonstrate they possess the skills, work ethic, and proper behavior before such status is granted.  In the long run, this change will improve the professionalism and morale of all state employees.”

The conservative Republican, who came to government after a successful career in business, described himself as “encouraged that each division continues to operate at consistently high levels of productivity given the reduction of funds caused by budget cuts.”

He said relations with the state Legislature were good during the 2011 session, his first as commissioner. He told CapitolBeatOK, “I have a very good working relationship with both legislative bodies and members of both the majority and minority caucus. I personally made an effort to meet each legislator individually during the last session.”

Costello “hosted various events for at the Capitol for legislators (not paid by the taxpayer) such as the ‘Cookie Cart’ where I delivered a written summary highlighting successes of the Labor Department and what we offer to the taxpayers. I also sponsored a majority caucus lunch in the House and during the last week of the session, I hosted an ice cream social as an expression of appreciation for the hard and difficult work members of the legislature put forth in the closing days of the session.”

Asked to outline key issues facing the agency, Costello was ready with a succinct outline of possible changes he will pursue if the Legislature concurs.  He said, “There are economies of scale savings still available to taxpayers by consolidating several other agencies into the Department of Labor.  For instance, the Construction Industries Board and the Department of Mines should be brought into the Department of Labor as separate divisions.

“I will propose a minor rewrite of the elevator inspection law to put responsibility where it belongs, with the property owner and their insurance provider.  As opposed to the current system that looks only at the mechanical function of an elevator.  If an elevator malfunctions, any injured party should be made whole.”

Beginning in the mid-1990s and accelerating over the past decade, under both Republican and Democratic administrations, legislative appropriations to the agency have led to steady reductions in the number of full-tine equivalent (FTE) employees working at the Labor Department.

Although there is always variance in the actual number of FTEs versus authorized FTEs at agencies, Labor’s theoretical number has declined from 104 (103.9) in Fiscal Year 2001 to 86 in FY 2011. The actual number, when positions funded with special funds are included, was 90 FTEs on July 1, 2011.

As is the case with many arms of government, the Labor Department may find it hard to replace some employees who are becoming eligible for retirement.

Costello reflected, “Currently, 12 full-time employees are retirement eligible.  Because of the high level of skill required by each of these positions, costs associated with recruiting, hiring and training a new employee are significant.  It will take between 2 and 5 years, depending on the area of expertise, for a new employee to reach productivity.”

The Labor Department contracts for a total of 13 Administrative law judges (9 in Oklahoma City, and 4 in Tulsa).

Legislative general appropriations (GA) actually amount to a small portion of the agency budget. GA for Fiscal Year 2012 are $373,660.  The OSHA special fund is $1,471,075, while the OSHA escrow amounts to $1,236,425.  A revolving fund has $1,112,751 in it. The multiple injury trust fund  $1,275,000.

At $1,976,464, federal grant funds are a significant element in the agency budget. The total annual budget of the Oklahoma Department of Labor for FY 2012 is $7,445,285.

As for possible changes that could help the state in general, especially areas over which he now has jurisdiction, Costello commented, “From my perspective, the most important issue facing the state and the Department of Labor is the need to foster the private sector’s ability to create economic vitality and jobs.  This can be accomplished through the phasing out the state income tax and the adoption of an administrative workers’ compensation system.

“Otherwise, Oklahoma will continue to lag behind Texas and worst yet, permanently lose the next generation of Oklahoma college graduates to better opportunities outside Oklahoma.”

The agency moved to a new location during 2010, and Costello was asked to judge the move.  He replied with reserve: “The previous administration moved into to the new building before I took office.  I was told by our directors and employees that the old building had a number of health and safety issues including a persistent mold problem.”

Commissioner Costello inherited a small agency, one with a generally good reputation for improving public safety and other tasks assigned in the Constitution and statutes. CapitolBeatOK asked for his assessment of the man he defeated in the 2010 election, when Republicans swept to unprecedented control of all statewide elected posts.  He was also asked to assess the legacy of the woman Lloyd Fields defeated, in the closest statewide election of 2006, three-term Commissioner Brenda Reneau.

Costello replied, “On the positive side, Commissioner Fields was unique among Labor Commissioners in the U. S. as he was the first to be certified as an amusement ride inspector and he also increased field productivity through the installation of GPS devices in state vehicles used by the Department of Labor.  On the other hand, his administration left sizable backlogs in wage claims and workers’ comp judgments.

“To set a precedent for future Labor Commissioners, I have implemented a new policy of Non-partisanship, I call ‘Don’t ask – Don’t tell’ regarding political affiliation. I do not seek nor will I accept information regarding the political membership of any employee of the Department of Labor.”

As for Brenda Reneau, Costello said she “inspired me as a citizen when she championed passage of Oklahoma’s Right to Work law and by demonstrating that Title 40 Section 1-b-3 can be used to advance the betterment of wage earners through aligning the interest of business with that of the wage earner.

“She demonstrated through the bully pulpit provided to the Commissioner of Labor that reducing government burden on the private sector is a key function of the office.”