THE GOVERNMENT PERFORMANCE PROJECTReport Card: Washington FINANCIAL MANAGEMENT: A- No state has made more of a virtue out of financial necessity than Washington. Hemmed in by a whole collection of spending limits enacted by the voters, Washington has had little choice but to plan ahead if it wanted to remain solvent. And so it applies long-term thinking to almost every important decision it makes. All budgeting is based on six-year and 10-year plans. Fiscal notes and budget policy proposals include information on the multi-year impact of the legislation being considered. Alternative economic scenarios are drawn up as well. Washington's revenue and expenditure forecasts are excellent, even in areas where other states slip up, such as corrections. "We put a lot of effort into prison forecasting," says the assistant budget director, "and that's a function of sentencing laws as much as population." This is one of the few states that does its entire budget (not just its financial statements) in accordance with the conservative restrictions of generally accepted accounting principles. GAAP figures show that the surplus has been growing steadily for some time. It's expected to be more than $900 million at the end of the current biennium, up from $513 million in 1997. Washington also does well on any measure of spending flexibility: Agencies can move cash around within programs, and they're being given the opportunity to move money between programs. About the only financial weaknesses are in contract management and cost accounting. Those could use improvement. CAPITAL MANAGEMENT: A As with finance, the capital planning process here emphasizes a serious long-term approach, perhaps the longest view taken by any state in the country. Agencies prepare a 10-year strategic plan of projects and capital investments. They used to do six-year plans, but with some very expensive projects coming up, Washington decided that 10 would be better. Not only is the plan good but pre-design work on major projects is excellent. Washington has stringent and consistent requirements for this process. Agencies do required condition assessments on their facilities, and executive and legislative officials make frequent site visits. The state is investing $250 million to $300 million in maintenance projects in each biennium, and these efforts are prioritized through a long-term "preservation backlog reduction plan," in which each agency develops a strategy to maintain facilities. HUMAN RESOURCES: B+ Managers who hire for Washington's 55,000 general service positions are still given only seven applicants to choose from. Traditional seniority rights also play a large role in restricting managerial freedom when it comes to promotion, reductions in job force and subsequent reemployment. That said, Washington is making enormous headway in its human resources systems—most notably in its management ranks. It has replaced some 750 management job classes with four broad bands, and is placing a wide and competitive range of salary options in the hands of the agencies. This is one of the few states making a genuine effort at workforce planning. It is looking at where personnel shortages are likely and where new needs will crop up. "We want to be better prepared than we were for the information technology staff shortage," says the personnel director. Training is also a high priority. Agencies are able to retain half the money they save from re-engineering efforts, and often utilize it to build workforce skills. MANAGING FOR RESULTS: B+ Governor Locke arrived in office with a management agenda as well as a political agenda, and has strongly pushed a quality initiative that emphasizes a results orientation. Locke supports the idea that performance budgeting and strategic planning should be integrated into one common initiative inside every agency. Reporting of results against targets is now required of all the agencies on a quarterly, not a biennial, basis. Plans call for agency performance against targets to be reported on the state's Web site. Still, the new emphasis has yet to penetrate the entire administrative structure. About a sixth of the agencies do not yet provide outcome-oriented measures, and the development of effective measures and useful data still requires work. INFORMATION TECHNOLOGY: A Washington is an innovator in this category. Its new centralized Performance Measure Tracking System allows agencies to enter and monitor progress against their own standards, a relative rarity in the states. The state data warehouse project was named on a list of the "most innovative computing projects in American business." The Department of Information Services markets its services in competition with the private sector. If the services it is providing aren't in demand—as happened, for example, with maintenance for desktop computers—it shuts them down, just like a business would. At the moment, Washington is changing its information planning process from one that dealt with individual projects—going through the usual route of budget submission, legislative approval and implementation—to a new process called "portfolio management." The idea here is that agencies maintain a portfolio of technology in the same way an investor might have a portfolio of stock. New investments must fit into the overall portfolio, not merely solve a single problem. This should be phased in statewide within a year. Generally, the state doesn't fund an IT project for more than two years. For the big ones, it appropriates enough money to get Phase I completed, and then demands results before moving on. AVERAGE GRADE: A-
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