Grading the States introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: Missouri GOVERNORS Bob Holden (Democrat, elected 2000) Roger B. Wilson (Democrat, took office 2000) Mel Carnahan (Democrat, 1993-2000) LEGISLATURE House — 87 Democrats, 76 Republicans Senate — 17 Democrats, 17 Republicans FINANCIAL MANAGEMENT: B+ Missouri’s financial practices have long been considered among the most efficient in the country, so it was a real shocker last year when a circuit court ordered the state to pay an unexpected $244 million in tax refunds. The court claimed Missouri officials had miscalculated the amount owed to its citizens over a period of five years. The state is appealing the decision; in the meantime, a good bit of current spending, particularly in the capital construction area, is on hold. Generally sound management, however, will help to keep state finances on an even keel despite this setback. Long-term fiscal planning is generally careful, with a close watch kept on prison costs, Medicaid caseload and school populations. Contingency funding is built into volatile budgets, and annual overall spending routinely comes in under budgeted amounts. The state’s newly combined rainy day fund and cash flow account has a balance of about 7.5 percent of general fund revenues, which helps maintain triple-A bond rating from all three agencies. A notable problem here: Missouri has about $1.6 billion in combined unfunded pension liabilities. CAPITAL MANAGEMENT: B+ Missouri’s five-year capital plans are solid, and include repair and rehabilitation of existing facilities. The state has made substantial investments here, including the establishment of a facilities-maintenance reserve fund to set aside money for preventive maintenance. The condition of facilities is well reported, and a cost-allocation plan carefully estimates the state’s maintenance needs. Missouri has also moved steadily toward consolidating and closing facilities. Examples include cooperation between corrections and mental health agencies to house a sexual predator unit on the campus of a prison, and establishment of a new mental health facility that brought together a number of other programs and group homes. But the performance of the state’s transportation department has left a bit to be desired. The expansion of highway projects that began in the early 1990s resulted in an underfunding of maintenance and preservation. In addition, the department has had problems bringing its projects in on budget and on schedule. “We didn’t think that this organization treated it as a commitment,” says the DOT’s chief financial officer. The maintenance budget has increased from $160 million to $240 million in the past two years, but some officials think much more would be needed to clear the backlog out. HUMAN RESOURCES: B+ Missouri has made tremendous progress in work-force planning, using interagency councils to supplement centralized efforts. New HR technology, now being implemented, will provide managers with much better data than they’ve had in the past. This drive to plan for the future comes not a moment too soon. To deal with the legal challenge that questioned the equity of the state’s retirement benefits, the legislature was recently forced into a statewide retirement-incentive program. This is good for potential retirees, but the new plan also makes it enticing for employees to leave the state just when it is difficult to replace them. Missouri has responded to this, and to the general pressure for good employees, by stepping up its recruitment efforts, implementing a new applicant tracking system and creating innovative programs to re-train state workers. The Department of Social Services now offers stipends to social work students who guarantee that they’ll sign on with the state after graduation. It also offers bonuses to existing employees who refer new ones for difficult-to-fill jobs. A long-range salary-improvement plan has brought state salaries overall from 21 percent below market levels to within 11.5 percent. “We’re closing the gap and we’re closing it on a moving target,” says H. Lee Capps, the former state personnel director. MANAGING FOR RESULTS: A- Two years ago, Missouri asked its agencies to winnow down their performance measures to a recommended list of 20, focusing on outcomes rather than outputs. Attention to these key measures is creating a results-minded budget process closely aligned to agency priorities. While other states are hesitant to share their measures with the citizenry at large, Missouri’s Department of Revenue features a description of its performance measurement system — and a Web address where citizens can learn more — right on the back of its tax booklet. The Department of Transportation posts project completion rates along major highway construction routes. So, just when citizens are asking, “What are you using my tax dollars for?” the state provides an answer. INFORMATION TECHNOLOGY: A- Missouri is nearly finished with a stem-to-stern replacement of its entity-wide information systems, aimed at expanding the utility of its data. For example, the new human resources system will inform the new capital management system about the number of employees who work in a building; and thus help building managers plan effectively. The state is heavily into e-commerce, and it approaches its e-commerce initiatives in a businesslike way. Says former CIO Mike Benzen: “We actually defined every transaction in state government that’s a Web candidate; what will it cost, what will it save the taxpayer, the state. And then we prioritized.” The state could use some more effort in making certain that IT projects actually deliver on their promised benefits. A project-management training program has been established, and project-management certification requirements will be phased in over several years. 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.