Stateline Story

Study Grades States on Management

  • January 31, 2005
  • By Kathleen Murphy
Alabama and California received the lowest grades, displaying the worst management overall, the study said.

The year-long study, "Grading the States 2005," was done by the Government Performance Project with $4.7 million in financial support from The Pew Charitable Trusts, a public philanthropy based in Philadelphia that separately also funds The study conducted by a team of college professors relied on a survey of state officials, interviews by Governing magazine journalists, and research of state documents such as budgets and workforce plans.

The states' managerial responses, such as how well they plan for repairing roads and maintaining buildings, are important because they eventually will affect a citizen's pocketbook, said Michael Pagano, a professor at the University of Illinois at Chicago who was one of five academics who carried out the study along with about 20 graduate students.

"Many states have cut back on their analytic capability; allowed their roads, bridges and buildings to decay at an accelerating clip; resorted to financial tactics that only defer fiscal pain; slowed down or rejected positive initiatives in human resources and in a few extreme cases have so undernourished government that they risk malnutrition or worse," said the 90-page report published in February's Governing magazine.

Utah earned the highest overall grade given, "A-minus," partly because of its efforts to communicate with constituents: A Budget Office newsletter about financial issues appears online and in local newspapers, and a Transportation Department panel truck stops in highly trafficked areas to solicit citizens' feedback on road planning, the report said.

Virginia also won an "A-minus" rating because of the highest possible grades for money management and because it has a "Learning Management System," a program that prepares for transferring knowledge as state leaders retire.

The report also warned of a "personnel tornado" because, in more than half the states, 20 percent of employees will be retiring over the next five years. In Tennessee, 40 percent of employees will retire by 2010, and Maine and Nebraska will suffer similar rates of brain drain, the report said.

Receiving the study's lowest grades of "C-minus," Alabama and California are wearing the dunce cap. Drivers replacing shock absorbers in Alabama would know why the state is lagging: A road maintenance backlog estimated at $1.6 billion brought down Alabama's grade.

California's equally dismal "C-minus" grade was caused by flops in managing money and information. In the state that's home to Silicon Valley, the nickname for the region south of San Francisco with an unusually high concentration of computer companies, California ironically uses financial management technology that is a medley of unconnected systems, the report said.

Meanwhile, Missouri, Virginia and Washington state received the top grade for information management, a category that graded efforts in, among other things, electronic government. Virginia and Washington, for example, won researchers' praise for posting customer waiting times at the Department of Motor Vehicles on state-run Web sites.

In the area of money management, Delaware, Utah and Virginia led all states, the report said. Researchers singled out Delaware's three-year-old effort called "Partners in Procurement" to save money by coordinating agency and school district purchasing to achieve better prices on items such as office supplies, packaged foods and furniture.

To their credit, in weathering a severe financial crisis of plunging revenues and rising costs that began in 2001, only a few states used accounting gimmicks to balance the books, the report noted. State budget gaps totaled $236.2 billion between fiscal 2002 and fiscal 2005.

"States have been trying hard to live within their means," said Katherine Willoughby of Georgia State University, one of the researchers.

All states but Vermont require a balanced budget, and several states relied on stopgap measures to balance their books, the report said. Tennessee's governor moved 9 percent of the state's highway money into the general fund to pay for assorted state expenses and deferred paying it back. New Jersey borrowed $1.9 billion to balance a $28 billion budget last summer, followed by a state Supreme Court ruling prohibiting such borrowing again, the report said.

The report said Georgia may have the best-managed human resources system in the nation. The state uses an interactive recruitment Web site and awards bonuses to employees based on achievements, the report said.

Utah received the highest grade for maintaining roads and buildings. Maryland, Ohio and Virginia tied for second.

The "Grading the States" study is intended for use by decision-makers and legislators who want to improve their state's management, said Susan Tompkins, director of the Government Performance Project in Washington, D.C. Comparing performance state-to-state can be done using the project's Web site to show trends in states' response to management decisions, Tompkins said.

No state received an "F." Researchers denied grade inflation.

"We're looking at so many different things. It's hard for a state to do all of those things badly," said Philip Joyce, professor of public administration at the George Washington University who worked on the study.