Grading the States introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: Maine GOVERNOR Angus King (independent, elected 1994) LEGISLATURE House — 88 Democrats, 62 Republicans, 1 independent Senate — 17 Democrats, 17 Republicans, 1 independent FINANCIAL MANAGEMENT: B- After years of operating in deficit — according to Generally Accepted Accounting Principles — Maine finally climbed out of the red in 1999, with a positive balance of $75 million. Other indicators are pointing up as well. The state’s rainy day fund is fully stocked at 6 percent of general funds, the revenue-estimating process has been greatly improved through the use of econometric models, and the state has helped itself by getting rid of a fiscal straitjacket law that triggered a reduction in the sales tax whenever the books showed 8 percent overall revenue growth. But in exchange for eliminating the sales-tax-reduction trigger, Maine’s legislature cut the tax itself to 5 percent as of last July. This move reduced income on an ongoing basis by about $60 million a year. While a four-year plan will help the state prepare for the necessary adjustments, surplus money had to be used in the current budget to make up the difference. This, coupled with a rise in health care costs, leaves a $200 million projected gap that budgeters will have to deal with. Some of the management problems that have burdened the state for years are still in evidence. Maine stands out, for example, in its requirement that the governor personally approve the most minute changes to state spending plans — anything over $500. CAPITAL MANAGEMENT: B- In the past two years, Maine has implemented a new capital planning process and a blueprint for its Capitol complex in Augusta. It’s been an impressive series of improvements, and there’s palpable enthusiasm for the changes that have occurred. Citizens have been deeply involved in the Augusta-area planning process, and they participate in many important capital planning decisions. In one instance, the state was no longer using a prison. Local residents were called on to offer their ideas, and the decision was made to tear down the prison and build a park. The maintenance side is hampered by a shortage of useful data, but the state is moving on this, with an IT system for maintenance scheduled to come on line next summer. This is particularly critical, as a backlog of maintenance requirements continues to plague the state. HUMAN RESOURCES: B- Maine had no work-force planning two years ago, but it has launched a new program to begin the effort. The Bureau of Human Resources has been analyzing work-force demographics and providing information to agencies about the issues they’ll be facing. One of the findings is that some 50 percent of managers will be eligible to retire in the next five years. To deal with this issue, the state has started a management excellence project, which will put more attention on training and developing new talent. A parallel effort is attempting to reduce managerial classifications to get rid of the minute distinctions that currently exist between titles. Maine has eliminated much required testing but still retains a restrictive “rule of six” for hiring decisions, which limits managers’ choices. Automation has sped up hiring somewhat, but the tight labor market and limited resources for recruitment have kept hiring slow. For example, a recent recruitment for state police didn’t turn up enough candidates. Openings were advertised for an additional three weeks to generate more interest. Good plan, but by the time the advertising blitz was over, many of the original applicants already had taken other jobs. MANAGING FOR RESULTS: C+ The campaign for performance measurement in Maine has been something of a roller-coaster ride. Four years ago, the legislature said it wanted performance-based budgeting. Then when lawmakers saw a prototype that they feared would limit their own discretion, they rejected the effort. Now the state has finally compromised on a middle ground. Performance measures will be in the budget, but the legislature will continue to use line items, and outcome measures won’t be forced on multi-agency programs. The real challenge is to get more agencies to take the process seriously while they wait to see how the measures are actually used. Maine’s agencies have been doing strategic plans since 1996; they are revised every two years. The ones for corrections and marine resources are excellent, and do an outstanding job of involving stakeholders, staff and legislators. Other agencies, including the Department of Education, still need to do more work. INFORMATION TECHNOLOGY: B- One of Maine’s biggest IT problems in years past was a virtually nonfunctional information system for statewide budgeting. Now a new one is being introduced, with all the bells and whistles. In addition, the state is putting together a comprehensive IT package for capital management, designed to evaluate the implications of each project and make sure the state stays on a good preventive-maintenance schedule. One remaining problem: the human resources information system. It handles the nuts and bolts of personnel data collection, but it doesn’t contribute very much valuable management information. Maine is making a major effort to bring as many transactions online as possible, without cost to taxpayers. It has developed a single Web site portal through a private-public initiative, and raises the money for portal expansion by allowing the private-sector partner to sell enhanced services. The state has lacked an entity-wide strategic plan in the past but hopes to have one in place within a year or so. It is trying to develop central tracking of new IT projects. And it’s moving toward a model for doing formal cost-benefit analysis of new IT projects. 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.