Grading the States introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: Louisiana GOVERNOR Mike Foster (Republican, elected 1995) LEGISLATURE House — 71 Democrats, 31 Republicans, 3 vacant) Senate — 26 Democrats, 13 Republicans FINANCIAL MANAGEMENT: C After a number of years in which books were solidly in the black, according to Generally Accepted Accounting Principles, Louisiana went into deficit in FY1999. And it looks like it is still there in FY2000. The major reason is that the insurance fund the state uses for its employees hasn’t increased its premiums sufficiently to cover costs, which have ballooned thanks to an aging work force, health care inflation and the loss of some subsidies once provided by HMOs. “If this truly was an insurance company, they’d be shut down,” says one official. Legislators created another headache last year by spending $70 million of tobacco money, then placing all future revenues from this source in a trust, unavailable for the purpose of making ends meet. So Louisiana started the year having to make up the $70 million. The governor dealt with the problem by enacting a spending freeze and cutting budgets. On the plus side, Louisiana finally has a funding mechanism for its rainy day fund, which contained $60 million at the end of fiscal year 2000 — not much, but a start. The state’s approach to estimating both revenues and expenditures — long and short term — is professional, and financial information is presented to citizens in a readable format. Despite the current round of problems, Standard & Poor’s has acknowledged past improvements in Louisiana’s finances by raising its bond rating from A- to A; an improvement, but still the lowest rating of the 50 states. CAPITAL MANAGEMENT: B Louisiana’s Department of Transportation is struggling with “scope creep” — the urge to expand projects far beyond the range that was initially approved. Keeping projects under control and on schedule has been a huge problem lately. Scope creep has caused budget overruns and delays. In an effort to deal with this problem, the department is stepping up its predesign work. In addition, once the state’s chief engineer signs off on budget and environmental statements for each project, all changes have to go through him. The state’s Department of Administration does a good job of prioritizing projects and planning for future capital investments. But the legislature still authorizes more new projects than the state can afford. Although efforts at maintenance continue to improve, there are still problems. Louisiana doesn’t keep estimates of deferred maintenance for its facilities, and there is no consolidated information on the maintenance history of state buildings. The director of Facility Planning and Control agrees that it would be good to centralize this information. HUMAN RESOURCES: B Louisiana has a newly designed — and much needed — performance-appraisal system, focused on improving communication between employees and managers. The Department of Civil Service is mandated to see that employee ratings are done on time and in accordance with procedures. If they’re not, the agency head will be called on the carpet. That’s typical here. The central personnel office oversees agency personnel efforts and does a good job of spotting and promoting best practices. When one agency’s approach to sexual harassment was found to be particularly successful, the same approach was considered by agencies throughout the state. A new office of accountability will further concentrate on targeting agencies whose performance — for good or ill — stands out from the norm. On the negative side, there is a backlog of more than 300 disciplinary appeal cases. That’s a big reduction from four years ago, but still a problem. Long-term work-force planning also leaves a bit to be desired. MANAGING FOR RESULTS: B+ Louisiana goes further than many states in making sure that its performance measures are accurate, and that agencies take the process seriously. When evidence mounted that the Department of Labor was inflating its results, the matter wasn’t handled in back rooms. The agency was chastised in public by the Joint Legislative Committee on the Budget. The state’s information technology systems allow reporting and tracking on some 3,600 different measures. Variances between standards and year-end indicators are made available to anyone interested. These efforts have strong support in both the executive branch and the House of Representatives, although not, so far, in the state Senate. And there’s been little effort to communicate this information to citizens. Strategic planning at the agency level is improving. Louisiana doesn’t have one single entity-wide plan, but it does approximate one through its “Vision 2020,” an economic development scheme that spreads out to areas including education, the environment and health. INFORMATION TECHNOLOGY: B- Two years ago, we reported that Louisiana suffered from the drawbacks of a deeply decentralized, unplanned IT operation, with “unintegrated, unstandardized systems slowing many processes.” Well, they’re fixing that. A newly centralized system is being created under a CIO whose position likely will be placed into formal statute this year. Standardization is still a weakness, but much progress has been made on this front, and more is anticipated soon. Louisiana has made many of its government transactions available on the Internet. It is now establishing the capacity for any agency to put any of its services online — and receive payment via the Internet — merely by plugging into a central system. In the past, some of the state’s biggest IT problems emanated from weak information systems in finance and human resources. Now there is a new financial management system in place, and it is helping, although it could use an upgrade on the budgeting side. And a new HR system has begun to come on line. The rollout had been delayed because the state underestimated the effort required for this huge project. Of particular note is the state’s automated system for tracking performance measures. AVERAGE GRADE: B- Copyright © 2001, Congressional Quarterly, Inc. Reproduction in any form without the written permission of the publisher is prohibited. Governing, City & State and Governing.com are trademarks of Congressional Quarterly, Inc.