Grading the States introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: Massachusetts GOVERNOR A. Paul Cellucci (Republican, took office 1997) LEGISLATURE House — 137 Democrats, 23 Republicans Senate — 34 Democrats, 6 Republicans FINANCIAL MANAGEMENT: B- Thanks to vast improvements in its estimating process, Massachusetts need no longer operate in denial when it’s facing budget pressures. That’s the good news. The bad news is it’s facing them right now. The reasons begin with the $1.2 billion in tax cuts passed last year by referendum. This, combined with previous tax cuts, will reduce revenues by about $700 million in fiscal 2002. What’s more, revenues are beginning to soften, health costs are escalating, and the state has added a new pharmacy benefit for senior citizens that will increase costs by $100 million. Fortunately, the state has a strong rainy day fund, equal to 7.1 percent of general fund revenues, and it has a number of other reserves set aside as well. Tobacco settlement money has not been diverted to replace regular funding. The state has also stayed on schedule toward funding its pension system by 2018 — in spite of a discovery made by the Treasurer’s Office that a software error had underestimated the unfunded pension liability by $2 billion. CAPITAL MANAGEMENT: C+ The Bay State’s “Big Dig,” its ambitious and often-praised effort to alleviate traffic congestion in Boston by moving the city’s central roadway underground, has turned into a capital planning albatross. It’s estimated that the Dig will cost $14 billion when it’s completed in 2004 — $3 billion more than the state projected in early 2000. And the true cost of the project may still grow. To cover its share of Big Dig funding, the state has issued $1.5 billion in grant anticipation notes that will be repaid with future federal aid. State officials argue that this mounting expense hasn’t taken away from other capital projects, but it seems inevitable that it will cut into future road and bridge programs. On the positive side, Massachusetts has a reasonably good capital plan that coordinates and prioritizes its projects, and reasonable monitoring and evaluating of most projects throughout their implementation. The state House of Representatives has made facilities maintenance a theme of its budget over the past several years (although the Senate has been less interested), so some progress has been made on that front. HUMAN RESOURCES: B- Massachusetts personnel managers comb the country for good ideas, “stealing the best of what we see and looking at what is most cost effective for us,” in the words of Linda Lyn-Weaver, director of customer service. For example, the central personnel office launched a survey of employee benefits in the other 49 states, and concluded it had to beef up child care and enhanced leave. Worker training is strong here, with a standard that every employee should aim for 30 hours of training a year. Recruiting has also become more aggressive. Last year, agency recruiters spent a day at a Six Flags job fair, to introduce young people to public-sector careers they might not have considered. Such efforts are particularly important in a state that is still stymied by a civil service system recently labeled as “overly bureaucratic, unresponsive, rule bound and control oriented” in a study by the Pioneer Institute for Public Policy Research. The study noted that as many as 40 percent of civil service employees are serving on a “provisional” basis, and that the grievance system is laboring under a two-year backlog. MANAGING FOR RESULTS: C Although there’s no legislative requirement for performance measures here, the Cellucci administration says it has made the development of measurable performance goals a priority for each cabinet agency. Currently, most of the agencies have their own strategic plans, but they aren’t very well coordinated. Also, most of the plans in use at the agency level tend to review previous accomplishments, rather than develop future strategies. The document Massachusetts refers to as its strategic plan focuses primarily on economic development. The governor views the budget — fleshed out with goals and measures — as the state’s central planning document. Massachusetts has issued about $2 billion worth of social service contracts, and most of these now include performance measures. Some simply describe outputs, but a majority include outcome measures; and the state is working hard to improve their quality. INFORMATION TECHNOLOGY: C The big challenge in Massachusetts is to come up with an IT governance structure that will encourage agencies to work effectively with one another. There has been some progress in this direction, and a broad-based e-government initiative has the potential to help. Still, the biggest current problem is insufficient integration among the agencies. Many of the agencies continue to run their own telecommunications networks, including the Department of Revenue and the Department of Employment. “People appear to feel very strongly about their networks,” says the state’s CIO, David Lewis. With that kind of problem, an entity-wide strategic plan would probably make a difference. The state hasn’t developed one since 1994, but last year, it decided to go through a strategic-planning process for e-government, and engaged a consultant to help. This is an important start. Meanwhile, Massachusetts has done well in implementing a state-of-the-art human resources information system. Two years ago, two payroll systems were in use — one of them little more than a glorified check-writer — and so there really was no human resources system at all. Now the state can boast HR technology far beyond the capacity of many other states. AVERAGE GRADE: C+ 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.