THE GOVERNMENT PERFORMANCE PROJECTReport Card: New Jersey FINANCIAL MANAGEMENT: B- After years of structural imbalance, New Jersey finally produced a budget this year that didn't rely on single-shot revenue gimmicks to balance the books. The Whitman administration did give its opposition a target to shoot at, however: The state has used long-term bonds to pay off unfunded pension liabilities, allowing critics to complain that this shifts money that should have come from the operating budget to debt. New Jersey's legislature continues to lowball its projections on prison spending. Estimates have come in at least 6 percent under actual expenses for three years, requiring supplemental appropriations that are jokingly referred to as the "midcourse corrections correction." Despite its estimating problems (or perhaps because of them), however, the state seems adequately protected against future hard times: State law requires that half the general fund revenues that come in over estimate go into a rainy day fund. The fund was 2.4 percent of general fund expenditures in 1997, and has grown since then. Looking into the future, state budget analysts see some problems keeping up with expenses—though they won't say how much because New Jersey's long-term revenue and spending projections are not considered public information. New Jersey makes good use of cost accounting to make decisions about privatization. It also has very good oversight of contracting. CAPITAL MANAGEMENT: B+ New Jersey's powerful unions complain when buildings aren't properly maintained, so maintenance issues get a lot of attention from the state's Capital Commission, a 24-year-old bipartisan entity which is responsible for capital planning. Fifteen years ago, the commission instituted a maintenance management system at 58 facilities in higher education and human services. This included a preventive maintenance program, and the program has continued ever since. The state is currently under court mandate to upgrade the condition of its school buildings, and bringing them up to snuff is going to strain future capital budgets. New Jersey maintains a complete capital inventory, including even parks and forestry. Condition assessments are left up to the agencies. Agencies submit seven-year capital improvement plans, as does the commission. Tracking of projects occurs through the Project Management Information System, which is currently being put online. HUMAN RESOURCES: C- New Jersey appears to have the record for number of job classifications: 8,000! Sadly, that's after a reduction of 1,000. This isn't the only way in which New Jersey personnel management is antiquated. The state still uses a "rule of three," which provides managers with only that many candidates to choose in hiring. Governor Whitman wants to expand this to a "rule of ten." In addition, the state relies heavily on written examinations, many of which are given only every six months. That leads to the necessity of hiring people on a provisional basis, awaiting their tests, and the state currently has about 2,000 provisional employees. Civil service reform is, however, a goal of the Whitman administration. Pilots are being conducted, in which candidates are ranked based on skills and experience rather than test scores, using software that matches job requirements to qualifications. When it comes to promotion, New Jersey's "merit" system awards seniority rather than performance. In theory, poor performers are penalized, but in practice, fewer than 1 percent of employees are rated as unsatisfactory. Training, on the other hand, is good. One really bright spot: New Jersey is a national leader in workforce planning. A detailed state government plan is being issued for fiscal year 1999. This should make it easier to move employees from departments that are downsizing to those that are growing. Unfortunately, the constrictions of 8,000 job titles can make lateral moves difficult. MANAGING FOR RESULTS: B- New Jersey has no formal statewide strategic plan, but agency strategic plans are submitted during budget development. Departments are required to provide evaluation data during the budget process, and the budget office makes good use of this information for decision making. Curiously, New Jersey does not consider those plans public information. The budget itself is presented in program format, with each program showing a description, objectives and program data. Unfortunately, the budget document does not include information that compares actual accomplishments to targets. Excellent cost accounting systems help to make measures even more useful to managers. INFORMATION TECHNOLOGY: B- New Jersey uses statewide standards in telecommunications, and its Garden State Network provides a telecommunications architecture. It is moving toward standardization of other systems as well. Mainframes in particular have gone through a period of consolidation recently. The state's centralized systems generally are good information management tools, with the prominent exception of human resources, which features a 30-year old payroll component. The state has no enterprise-wide strategic plan, but creating one is a goal of the newly appointed CIO, who has put together strategic planning teams. The Office of Information Technology doesn't require strict return on investments for new projects—though the budget office would like those kinds of figures—but it is moving toward developing a means for evaluating IT efforts. AVERAGE GRADE: B-
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