THE GOVERNMENT PERFORMANCE PROJECTReport Card: Maine FINANCIAL MANAGEMENT: B- In 1998, for the first time in seven years, Maine did not have to issue tax anticipation notes to cover cash-flow shortages. No one-time revenues were used to balance the budget, either, and Maine's rainy day fund is at 5 percent of general fund revenues. In fact, after a period of serious fiscal brinkmanship in the early 1990s, brought about largely by partisan warfare, so much effort has gone into controlling expenditures in Maine that managers can justifiably complain they lack sufficient flexibility to do their jobs effectively. Agencies can't move funds between line items—even a few hundred dollars—without obtaining gubernatorial approval first. Ironically, after such determined efforts at self-control, the state's finances are now challenged by a law that triggers a permanent half-percent reduction in the sales tax whenever there is 8 percent overall revenue growth. When the bill was passed, that level of growth seemed implausible. But a jump in capital gains revenues pulled the 8 percent trigger. Now, unless the law is changed or repealed, it will cost state government about $62 million, leaving a $41 million budget shortfall in the next biennium. Maine's accounting policies have been cleaned up somewhat in recent years—the state used to account for all manner of receivables as though they were cash in the bank. But Maine is still rather loose in the way it accounts for expenditures; it books them only when they're actually paid. CAPITAL MANAGEMENT: C- Maine has never been very solid at capital planning, but for most of this decade, that didn't hurt much: It was so short on cash that there were few capital projects anyway. Now that fiscal conditions have eased, the state is working on a new capital planning process, and has begun a long-term master planning effort for the state Capitol complex. Detailed reports and analyses are required for large projects. Even so, there has been no fully integrated capital budget, and very little structured planning. "We are not satisfied with the process we have in place for either analyzing our current needs or projecting them into the future," says the deputy commissioner of administrative and financial services. The state's deferred maintenance has been projected at $150 million, although that figure is being whittled down. The cost of routine maintenance is estimated at about $15 million annually, of which $6.5 million is funded. Rent charges to agencies will help fund maintenance better in the future. HUMAN RESOURCES: C+ Maine has been moving from a culture that emphasized strict centralized personnel controls to one in which the personnel department is more service-oriented. "We're getting buy-in to break down that we/they mentality," says Donald Wills, director of human resources. Maine also has successfully cut the number of job classifications from about 1,500 to 1,100. Though it retains a rule of six—managers receive a list of only a half-dozen candidates for each job opening—it is trying to train managers to utilize the system more effectively by tailoring their requests to include the qualifications they really need. "Many managers didn't realize you could have a selective certification," says Wills. A new performance appraisal system has been established, in which employees and supervisors set expectations at the beginning of the year, against which all the employees are then measured. Workforce planning, unfortunately, is all but nonexistent in Maine. MANAGING FOR RESULTS: C In 1996, the legislature directed Maine to move toward a performance-based budgeting system. Then the executive branch came up with a sample, and the legislators changed their minds, fearful that it would impinge upon their power. Current plans are less ambitious. A prototype is hoped for in the 2000-2001 biennium, and implementation in the biennium after that (if deeply suspicious legislators don't get scared again). The state does have strong champions of performance measurement in the governor and a few legislators. It began doing strategic planning in 1997, and in 1998 the plans included performance measures. Though the managing-for-results process is still in the early stages, agencies are beginning to see some benefits: Measures showing a rise in snowmobile accidents led to expanded education and to a subsequent decline in the accident rate. INFORMATION TECHNOLOGY: C IT systems for budgeting in Maine fall far short of the state's needs, and are little help to agencies in developing their budgets or to the budget bureau in solving its analytical problems. Hopes for a new information system were stalled in the legislature in the midst of a debate over whether or not the new system should support performance budgeting. The state maintains a data warehouse, which provides agencies with easy access to central personnel and financial information, and funds are available for ongoing modernization of a wide-area network. A strong central office oversees technology use, but Maine lacks central monitoring of projects as they move from development to implementation; new proposed legislation may help alleviate that. In an effort to encourage employees to become better trained in technology, the state is giving a 5 percent salary stipend to individuals who get 40 hours of training during the course of the year. AVERAGE GRADE: C
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