REORGANIZATION was in the air when Gov. James R. Thompson first got elected in 1976. It wasn't the most burning issue in the world, but there was general agreement that in spite of efforts by Govs. Stevenson, Kerner and Ogilvie, no one had successfully consolidated the state bureaucracy since 1916. The time had come to have another go at the little boxes on the state organization chart -- if there was a chart that would show all 65 major agencies plus the 250 minor ones that the governor is supposed to be in charge of.

As a kind of prize of office, the newly elected Thompson received a copy of the Bonniwell Report on "Orderly Government." It was put together by a task force jointly appointed by candidate Thompson and his Democratic opponent Michael J. Hewlett. He also had an as yet untried tool of reorganization, the executive order, provided by Article V, section 11, of the 1970 Constitution to give Illinois governors the initiative in shaping agencies directly under their authority.

The problem with reorganization is that nobody likes it. It is easy to put new squares on the organization chart in response to a crisis or to carry out a federal mandate, but it is not easy to erase or merge them. Once an agency exists, the people it serves become a highly protective constituency, afraid that consolidation will block their access to needed services. And agency people are loathe to change the status quo -- not necessarily because they think it is best, but because it is the most comfortable. They know how to play the bureaucracy to keep their power and/or get their work done.

During his first term of office when he enjoyed an idyllic relationship with the Democratic majority in the General Assembly, Thompson used the executive order to push through changes in administrative services, law enforcement and energy. In the process, he showed that the executive order can be an effective catalyst for reorganization. But in his second term, the Democrats have not been so cooperative. As a result, Thompson's bill to reorganize the state's human rights agencies and his executive order to create a new Department of Commerce and Community Development have hit some unexpected snags in the General Assembly this session.

Probably Thompson's biggest reorganization achievement so far took place early in his first term when he centralized authority in the Department of Law Enforcement (DLE) by dividing it into five divisions answerable to one director. Basically all he did was give the DLE -- in the words of the Bonniwell Report -- the same kind of unity that exists in any county police department. But that meant a loss of authority for both the State Police and the Illinois Bureau of Investigation, an elite group that had been created with much hoopla during the Ogilvie administration.

Reorganizing DLE was the first big test of the efficacy of an executive order in the face of opposition from interest groups. The lawmakers let the order go through and passed conforming legislation. They added, however, a provision that created an independent Office of the State Fire Marshall. The firefighters, formerly lodged in the old DLE, had been lobbying for this office for a long time. The executive order gave them a focus, and the legislature bowed to the traditional reluctance of firefighters to be identified as an arm of the law.

Thompson's 1978 reorganization of the state's energy agencies is a good example of executive and legislative cooperation. According to Joan Schilf, an assistant to the governor on reorganization, the Thompson administration originally planned to wait until Carter had organized an energy policy. "Thank God, we didn't do that!" she said.

Instead, Thompson issued an executive order merging the Institute for Environmental Quality and the division of energy, then in the Department of Business and Economic Development (BED). The lawmakers accepted the order, and used the implementing legislation to improve upon it. They added the natural resource, water and geologic surveys to the new agency which was to be named the Institute of Natural Resources (INR).

The kind of reorganizing that created INR is listed in the Bonniwell Report as a minor improvement that does not require "any consensus about the philosophy of government involved on natural resource activities."

But Thompson's staff said INR is a good core agency and that its think-tank, research approach is the best. "Look what happened to the federal DOE [Department of Energy]" Schilf said. "The state role in energy is soft. It is better to tie it to research than to bureaucratic rules and regulations."

Reorganization of the Divisionof Vocational Rehabilitation (DVR) was also well orchestrated. The governor started things off by issuing Executive Order No. 1 earlier this year to transfer some programs for disabled children and adults from the Department of Children and Family Services (DCFS) to DVR. But reorganization was completed through legislation, H.B. 2380 (P. A. 81-36), signed by the governor in June. The new law gives DVR code department status and changes its name to the Department of Rehabilitative Services (DRS).

Reorganization enables DRS to administer greatly expanded independent living services for handicapped persons as mandated by Congress --and to qualify for federal funds. The big question is: now that the state has made itself ready, will the federal government come up with the money?

By all accounts, Thompson's human rights bill, S.B. 1377, should have sailed through the General Assembly this session. A good bill with ample bipartisan support, it would consolidate the

state's human rights agencies into one department with one commission to hear complaints. The bill would also broaden and recodify the law on human rights so that it can be found in one place in the statutes.

Thompson laid the foundations for the legislation in 1978 when he signed a Democratic bill creating a department to oversee affirmative action programs for state workers and announced that this would be the base for his larger reorganization proposal. (In this case, Thompson could not reorganize by executive order because S.B. 1377 expands human rights law, and the two commissions involved are not directly under the governor's authority.)

S.B. 1377 passed both houses, but the House failed to recede from an amendment and it never got to the governor's desk. "There was no substantive objection to the bill at this point .... The bill was caught up in personalities," said Paula Wolff, Thompson's program director. The personalities were those of rival black caucus leaders Rep. James C. Taylor (D., Chicago) and Sen. Harold Washington (D., Chicago).

The situation with Executive Order No. 3 creating a Department of Commerce and Community Affairs (CCA) is more complex. Until he issued the order, Thompson had emphasized the obvious in reorganization and avoided high voltage areas where conflict was likely. It is true that the creation of CCA would please his business constituency and enhance his image as a booster of economic development. But it would also merge three major agencies: BED, the Department of Local Government Affairs(DLGA) and the Governor's Office of Manpower and Human Development (GOMHD). If Thompson can pull this one off, he will have earned his credibility as a reorganizer.

His staff was ready last year with the proposal. "We were within hours [in 1978] of putting the proposal into an executive order," said Richard J. Carlson, another assistant to Thompson on reorganization. Instead, the staff spent over a year massaging the various agencies involved and conferring with the Illinois State Chamber of Commerce (ISCC) which was proposing legislation to transfer the powers of BED to a new commerce department.

Carlson explained the new department as "a broad-based development agency for local communities." DLGA was developed in response to federal programs; BED deals with the private sector. According to Carlson, people at the local level were asking: "Why two agencies?" Meanwhile, GOMHD, created to take care of the federal CETA program (Comprehensive Employment Training Act), had accumulated other programs as well, including the Small Business Office.

In a sense, Thompson has pulled it off. Executive Order No. 3 squeaked through the General Assembly. According to Carlson, the House failed to count the 60-day deadline correctly, took no action, and Senate Democrats could not get enough votes to disapprove the order. Effective October 1, the newly created department comes into being. But the governor's order no longer has any implementing legislation, and this may pose legal problems. S.B. 1191, which codifies the executive order, never got out of Senate committee. H.B. 1400, the ISSC bill, was amended to agree with the order so that it could be the implementing legislation. But Democrats passed their own a-mendment to H.B. 1400 and took out GOMHD. Labor, in particular, opposes GOMHD's inclusion in an agency that is an advocate for business. This means that in the fall the governor must get some kind of implementing legislation passed in order to finalize the executive reorganization.

It seems clear that Thompson is going to have a rougher time getting his proposals through. And a question is raised by his appointment of former Public Aid director Arthur Quern to coordinate government administration. Quern has played a key role in many of Thompson's most important programs and is generally credited with straightening up the mess in the Department of Public Aid. Does this mean there will be massive reorganization in the state's human services agencies?