GOVERNOR
John Engler (Republican , elected 1990)
LEGISLATURE
House — 59 Republicans, 51 Democrats
Senate — 23 Republicans, 15 Democrats
FINANCIAL MANAGEMENT: A-
In the early 1980s, Michigan’s bond ratings were abysmal. Now its bond ratings are a solid triple-A, its budget stabilization and school aid reserves are well stocked, there is a solid balance between revenues and expenditures, and even Medicaid cost projections have recently been more accurate — which they are not in most places.
The state has eliminated short-term borrowing by changing the timing of its school and university payments. It is in the process of improving its debt management with a new Debt Advisory Board that will advise the governor on the state’s capacity and help to coordinate the timing of debt issuance.
Michigan’s use of tobacco settlement money is particularly intriguing. The state is putting 75 percent of that money into a program which gives a $2,500 merit award for college or vocational education to students who pass all four sections of the Michigan Educational Assessment Program.
A few niggles: Michigan doesn’t have a long-term public outlook for its revenues. And contract management could be improved.
CAPITAL MANAGEMENT: A-
Michigan has taken recent steps to improve maintenance. It has pumped an extra $75 million into major maintenance projects, implementing an automated Maintenance Management System that produces daily reports of necessary preventive repairs. A comprehensive inventory system is about to go online, and the state is developing a formula to keep routine maintenance adequately funded.
Transportation maintenance looks good, too. The DOT’s preventive-maintenance program is estimated to have saved several hundred million dollars’ worth of reconstruction. But deferred maintenance isn’t calculated for buildings or transportation, and that would better help the state plan for critical repairs.
The state is also focusing on consolidating space. A tri-county plan may save more than $2 million in its first year alone.
The increased use of predesign has helped keep projects on budget and on schedule.
HUMAN RESOURCES: B+
Michigan’s personnel practices are in a state of transition. The state is beginning to move ahead on formal work-force planning and on developing a competency-based approach to human resources — identifying the skills and behavior needed for particular jobs, and then basing its hiring, appraisal and pay on those same areas.
The number of written tests for job applicants has been reduced from 50 to seven, and recruiting is now largely in the hands of departments. Hiring speed has improved as a result, but managers are still working out the details of meshing traditionally centralized recruitment efforts with newly decentralized ones. For instance, the abandonment of most hiring lists means that candidates apply for each position individually. This is good for managers, who no longer have to sort through long lists of applicants, but job-seekers now have to find and apply for each particular job. Starting this month, agencies are required to post jobs on a central Web site, which helps.
There have been some tensions with labor over privatization and drug-testing issues, but labor-management partnerships have been used successfully to create career-development opportunities. The personnel department has made aggressive efforts in recent years at soliciting employee opinion through focus groups.
MANAGING FOR RESULTS: B+
Michigan believes in MFR, and believes in doing it in full view of the public. “The more that you publish your results, the more citizens want,” says one official. “And the more the people delivering the service want to do better.”
One particularly successful MFR initiative has been the comparison of efforts across county lines. For example, the Family Independence Agency — whose mission is to make sure every family in the state can support itself — regularly reports how every county is doing in that effort, and touts the success of counties that have achieved their goals.
The state has made progress in using actual results measures in the management of many of its contracts. For example, the transportation department contracts with a private firm for maintaining state highways in the vicinity of the capitol. The contractor gets the same fee every month in exchange for a simple performance goal: no potholes.
While Michigan’s MFR is getting better and better, there are a few areas for improvement: Although state leaders argue that the governor’s State of the State address is the same as a formally written strategic plan, Michigan might well benefit by creating the latter. Some agencies, meanwhile, are generating reams of data, as opposed to information useful to managers. And effective target-setting remains a challenge for some departments.
INFORMATION TECHNOLOGY: A-
Michigan makes its IT choices very carefully. “We were just recently looking at purchasing a new mainframe for additional capacity,” says the state’s CIO, George Boersma. “And we looked at what that additional capacity really costs us per unit, so we can get a true evaluation of whether we’re making the right decision.”
This kind of rigorous approach has helped keep Michigan in the forefront of state-level technology in a variety of ways. The state has one of the most robust data warehouses in the country, which easily provides a wide variety of financial information to the state’s managers. The human resources information system — already very good — is being upgraded to allow employees to go directly into the system and change their own information: addresses, deductions and 401(k)contributions.
Standardization has been a weak spot in the past, but that is changing.
AVERAGE GRADE: A-
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