Grading the States introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: New Hampshire GOVERNOR Jeanne Shaheen (Democrat, elected 1996) LEGISLATURE House — 256 Republicans, 143 Democrats, 1 independent Senate — 13 Republicans, 11 Democrats FINANCIAL MANAGEMENT: C+ New Hampshire remains in a condition of court-imposed fiscal crisis. Ordered by the state Supreme Court to equalize school funding among its communities, at a cost of more than $1 billion, the legislature and governor have been unable to agree on a solution. In addition to two small tax adjustments, funding was cobbled together for the current biennium, using up general fund balances and tobacco-settlement money. But that approach can’t last, and everyone knows it. The rainy day fund is relatively small, and the state’s balances are hovering just above zero. For years, people claimed that it was suicidal for New Hampshire politicians to talk about an income tax. Soon, it may be dangerous not to. It’s a bit of an irony, because except for this problem, New Hampshire generally has good financial practices. It’s one of only a handful of states that received the Government Finance Officers Association’s popular reporting award, as well as a Certificate of Achievement for its more technical financial report. The popular report actually proved popular! The state had to go back for three additional printings. “We’re getting letters from citizens saying how great it was that they could see information in a way that they could understand it,” says Don Hill, commissioner of the Department of Information. CAPITAL MANAGEMENT: C+ New Hampshire’s relatively small population and geographic size make capital management somewhat easier here than in other places. Many state buildings share the same complex, facilitating communication among the Department of Administrative Services, agency heads and planning groups. The Department of Transportation reports to the Department of Administrative Services and the legislature, rather than going it alone, as similar agencies do in other states. That means that DOT capital projects are included in the same budget as facilities, which can be useful. In other ways, however, New Hampshire suffers from excesses of decentralization. Agencies develop their own technology for tracking the condition of physical assets, so there is no overall database for managers to consult. Coming up with one is a current priority. “We need to know what’s going on statewide,” says Rosemary Faretra, of Administrative Services. An integrated system, she says, will help the state better manage its resources. HUMAN RESOURCES: C+ New Hampshire has worked hard to develop some innovative training programs. With a particular shortage of technical people, for example, there is a program allowing agencies to identify workers who have an interest or facility for technical jobs. Then they’re trained to do them. There is a desire to do more work-force planning of that sort, but the paucity of central resources, technology weaknesses and lack of statewide strategic planning make it difficult. The compensation system also needs an overhaul. Some 65 percent of employees are at the top of their pay grade, which creates motivational issues and leads to misuse of the classification system. A “career ladder” program has been instituted, which will make it easier for employees to move up in the ranks. New Hampshire has an unusual labor situation. Some 75 percent of its managers are covered by union contracts, although many aren’t members. Bargaining units are organized by agency, not by job function. This means that managers are in the same bargaining unit as their subordinates. Just guess how that impacts on their ability — or desire — to deal aggressively with performance problems. “Some managers and supervisors don’t really understand their role,” says one observer. MANAGING FOR RESULTS: D It appears that the state’s requirement that all agencies have strategic plans for their information technology is resulting in many of them refining their business plans as well. But that’s still just a start, and there is no statewide strategic plan here. Some agencies utilize performance measures, but they are almost always simple measures of output. A promised move to performance budgeting is still embryonic. Two years ago, the governor was talking about getting five or six agencies involved in a pilot process, with a promise of more budgetary freedom as an incentive. That sounded good, but in the end only two agencies were designated as pilots. Will the effort move on? “My sense is that agencies would really like to participate if it meant they’d have more control over their funding,” says Rosemary Faretra, of the Department of Administrative Services. “But whether or not that will happen depends on the legislative process.” Of course, the future of performance measurement here will also be largely contingent on the support of the governor. INFORMATION TECHNOLOGY: C The Granite State needs new entity-wide information systems. The ones it uses have been in place for at least a decade and don’t provide managers with adequate information. The state has alleviated this problem somewhat through the use of data warehousing, but it is going to the legislature for money to start new major systems. It’s hard to say whether the state actually has a CIO. Thomas Towle, director of information technology management, does many of the jobs a CIO would, but has no authority over the operations side. “I’m more of a planning position,” he admits. “I don’t hire or fire people or anything like that. And I can’t hold the IT people accountable.” Lack of such a powerful central position has brought difficulties in establishing an entity-wide architecture and developing formal standards for permissible procurement. There are a reasonable number of de facto standards, though. One significant accomplishment has been the implementation of a wide-area network that services all agencies with e-mail, Internet access and interagency communications. The network is expected to evolve to provide capability for all forms of e-government activities. AVERAGE GRADE: C Copyright © 2001, Congressional Quarterly, Inc. Reproduction in any form without the written permission of the publisher is prohibited. 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