Grading the States introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: Nebraska GOVERNOR Mike Johanns (Republican, elected 1998) LEGISLATURE Single non-partisan chamber: 49 senators FINANCIAL MANAGEMENT: A- Healthy conservatism is generally a hallmark here. There is no debt, pensions are fully funded and procurement practices are excellent, with a new formalized training program in place for financial managers. The rainy day fund is equal to about 7 percent of general revenue, and another 3 percent of estimated revenue is kept in reserve when the biennial budget is put together. Nebraska has loosened up on some of its restrictive agency spending controls. Not so long ago, every travel expense or other payment, no matter how small, had to be approved by a pre-audit section of the accounting division. Now that process is limited to transactions over $1,500, which is somewhat more reasonable. In the past couple of years, the state has used its surpluses to relieve the property-tax burden. This could be a problem if it were a permanent change, but the tax credits have been made contingent on the continued health of the budget. The period ahead may put some pressure on that budget, because Nebraska is being required to take on some additional funding for schools, and because Medicaid spending is up sharply, a result of increased usage and a reduction in the federal matching rate. CAPITAL MANAGEMENT: B Ten years ago, Nebraska began constructing a 600-mile expressway system. The project is eight years behind schedule, and seems likely to fall further behind. The issue is funding. The expressway often seems to lose out to higher-priority programs. But it’s still a bit of an embarrassment. Otherwise, the Department of Roads has been pretty successful with its scheduling. In most years, it’s been able to deliver its whole program, and in fiscal 2000 it missed by just one project. Containing costs has been more difficult. Because the department doesn’t include inflation in its cost estimates, fiscal 1999 expenses ran about $65 million more than what was published. The current year is running closer to estimates. On the facilities side, an excellent capital planning process that began a couple of years ago seems to be fulfilling its promise. The State Comprehensive Facilities Plan is well integrated into Governor Johanns’ goals for state government. Perhaps most important, maintenance funding has been a top priority. HUMAN RESOURCES: C Most states are trying to increase pay flexibility, so managers can retain employees and recruit for hard-to-fill jobs. Nebraska, sadly, has gone in the opposite direction. Labor contracts that went into effect in 1999 put the state on a rigid step-pay plan. “To me, we went back to about 1965,” says one HR official. Almost a year ago, unions challenged Nebraska’s ability to hire anyone above starting pay levels. Although the threat wasn’t fulfilled in court, the state still has problems recruiting for certain positions. Openings in engineering have gone unfilled for more than a year, and there are long-standing vacancies in corrections, where turnover doubled between 1997 and 1999. Given its pay problems, Nebraska is fortunate to have successfully automated its hiring process, with job-matching software and a system that notifies applicants about jobs they may be qualified for. This has left HR staff free of a lot of the process-oriented work of the past. The state also has made advances in using informal “mini-hearings” to cut back on the length of time it takes to resolve employee grievances. MANAGING FOR RESULTS: B- Nebraska started to move to performance measurement in 1997, when it declared its intention to push its agencies toward the use of outcome measures. The state still has a ways to go. While mission statements and performance measures exist for each agency and for sub-departments within agencies, their quality varies widely. The Nebraska Ethanol Board, for example, promises “to achieve goals by an investigation of some relevant statistics.” Even some areas the governor is deeply concerned with — such as public safety and education — do not have strong measures in the current budget. Many of the formalities of strategic planning are absent here, but cookie-cutter definitions of good planning don’t necessarily work in a state this small. It’s clear that the budgetary process is well utilized in managing for results, and that public participation in policy making, expressed through a considerable number of advisory bodies, is taken seriously. The budget director is so committed to citizen involvement that he makes a point of saying the governor can be reached directly at his residence by anyone who wants input. We tried, and he wasn’t in. But it was clear that Nebraskans could, indeed, reach him at home. Try that in New York. INFORMATION TECHNOLOGY: C+ The state has long needed to upgrade its enterprise systems — notably in human resources — and is finally making a move to do so. A contract is expected to be in place this spring for a new system that will be used all across the administrative spectrum. Officials insist the comprehensiveness of this venture will make it worth the wait. “Our systems don’t have the capacity to serve the larger agencies,” says one. “It was a choice of having the larger agencies go off and do their own things, or to bite the bullet and bring in a system that will benefit all agencies.” Nebraska has developed its first statewide strategic plan for information technology, a good step forward. Agency-level plans could use some improvement, however — they tend to be overly general. Written standards still aren’t in place for the majority of hardware and software, although Nebraska is moving in that direction. The state has used informal efforts to avoid jarringly unintegrated systems. But it recognizes the need to formalize the process. 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.