Grading the States introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: New Jersey GOVERNOR Christine Todd Whitman (Republican, elected 1993) LEGISLATURE House — 45 Republicans, 35 Democrats Senate — 24 Republicans, 16 Democrats FINANCIAL MANAGEMENT: B One thing New Jersey has learned the past few years is that being tough on crime isn’t cheap. For three years in a row, the legislature had to enact supplemental appropriations just to pay for the operating costs of prisons. Now officials can hope that corrections spending has been locked down; no supplementals were necessary in fiscal 2000. With that accomplished, the job of estimating revenues and expenditures will be easier, and it is a job New Jersey generally performs well. The rainy day fund is 3.5 percent of general fund revenues, and the state seems committed to building it up. Major bond rating agencies have acknowledged the improving financial status; New Jersey now has a AA+ from Standard & Poor’s, and an Aa1 from Moody’s. This is particularly impressive considering that the state maintains a high level of debt; $15.7 billion at the end of fiscal year 2000, up from $10.2 billion in 1993. Given this relative competence, it’s somewhat surprising that the governor’s budget office in New Jersey is so secretive. The office has a long-standing policy of announcing revenue projections only for the upcoming budget. Beyond that, all projections are internal. Really internal. Not only aren’t they shared with the press, they aren’t shared with the legislature. CAPITAL MANAGEMENT: A- Virtually every dollar of New Jersey’s capital spending is carefully accounted for. The state Commission on Capital Budgeting and Planning, which coordinates the process, is a model. It recommends capital projects and their methods of funding, comments on ongoing projects and reports the impact of projects on operating costs. The commission consists of four public members, four legislators and four members from the executive branch. It is bipartisan and advises both the governor and the legislature, a crucial fact given the frequency with which other states wind up with different goals from different branches of government. The state’s seven-year capital plan is realistic. For the most part, projects for buildings and transportation come in close to target dates and within budget, although the additional labor needed for school and transportation programs has led to some bids coming in higher than anticipated. The maintenance effort is not quite as strong as the planning process. Although the state’s maintenance needs appear to be reasonably met, some agencies have rebelled against an effort to use a unified database for their annual maintenance needs, so the process is decentralized, placing some limitations on the flow of information. HUMAN RESOURCES: C- New Jersey is making only slow progress here. Hiring is still heavily reliant on formal tests, and testing very often delays the process. Appeals of disciplinary actions can take a year and a half, and when the decision is made to fire someone, 50 days notice is required, far more than in other states. Fewer than 1 percent of new employees are fired during the probationary period, a very sparse number. This could reflect the state’s skill at picking workers, but another reason is more likely: New Jersey is one of only a few states to give probationary employees some appeal rights. New Jersey also holds the dubious record for number of job titles — 8,500 at last count. But a consultant has been hired to reorganize the classification system, with a goal of slimming down to 2,000 titles and plans for a compensation structure that rewards performance for all employees. Managers receive pay for performance now, but most employees are locked into a rigid pay plan that leaves little room for rewarding superior efforts. One significant positive note: The state is in the midst of an all-out training effort, with a 50 percent increase in the number of employees trained in the past three years. MANAGING FOR RESULTS: B- Governor Whitman is committed to managing for results, and has tried to coordinate various local, regional and statewide agency plans. New Jersey’s official State Plan now contains about 30 overarching goals and performance measures. It is primarily a vision document, including some small case studies, and outlines of specific policies intended to help achieve the state’s goals. The budget is chock full of performance measures, but many of them are either simply inputs or costs per transaction. Outcome measures are less common, although the state has been training its executives to help drive its performance system toward a results orientation. The legislature doesn’t appear to utilize the measures extensively, but that doesn’t matter much in this strong-governor state, where executive-branch budget proposals tend to pass through the legislature relatively unaltered. INFORMATION TECHNOLOGY: B New Jersey’s IT operations are in reasonably good shape now, and the state is well positioned to make dramatic progress over the next few years. It’s in the process of replacing or upgrading virtually all of its entity-wide systems with a so-called Enterprise Resource Planning System (ERP). A request for proposal is out, and the state hopes to begin its efforts with personnel and payroll. That makes sense; the ancient payroll system isn’t going to be supported much longer by the vendor, and the HR system is inflexible, requires much manual intervention and doesn’t easily answer queries. The Garden State is also developing an enterprise-wide data model, which will facilitate future efforts to share information. The first step is identifying all the data maintained by state government, with an eye to understanding how it’s used by various agencies. Eventually a data warehouse will hold all that information, in a way that permits easy access by managers. This effort is complemented by the state’s GovConnect Initiative, which aims to connect all New Jersey municipalities with its primary network. 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.