Grading the States introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: Ohio GOVERNOR Bob Taft (Republican, elected 1998) LEGISLATURE House — 60 Republicans, 39 Democrats Senate — 21 Republicans, 12 Democrats FINANCIAL MANAGEMENT: B+ Ohio’s financial management is sound, despite the fact that it lacks some of the more formal policies found in other well-managed states. The budget has been kept in solid balance, there is a stable rainy day fund and a large portion of the recent surpluses have gone toward temporary income-tax reductions — not risky permanent commitments. Ohio’s budget and financial reporting regularly win awards from the Government Finance Officers Association. In the past year, the state has tightened up debt-management policies and practices and created a clearer oversight role for the Office of Budget and Management. It could still benefit from a longer-range outlook on its revenue and expenditure projections, and the upcoming modernization of its 15-year-old accounting system. One cloud on the horizon: The Ohio Supreme Court ruled last spring that the state’s school funding system was still unconstitutional, despite several years of effort to fix it. As in other states, the bill to get things in order could be huge. CAPITAL MANAGEMENT: B Ohio has a rather “talky” capital planning system. Agencies submit project proposals to the Office of Budget and Management. OBM reviews and prioritizes the proposals and compiles a six-year plan. Then, instead of simply using standard criteria to prioritize, it conducts a series of meetings with the agencies to develop a sense of the relative need for proposed projects. “We try to respect the differences of each agency,” says David Gehr, a senior budget analyst. “We discuss, discuss, discuss.” There’s no disputing that it’s thorough. The question is whether it’s overkill. The Department of Transportation gets a lump sum for its budget, without specific project approval by the legislature. The department takes care of maintenance and operating needs first, then what’s left over — often around $300 million — goes to new construction. This “what’s left-over” method of financing seems somewhat random, but funding has been steady for the past few years. Deficiencies in the state’s multi-lane roads doubled from the late 1980s through 1997, due mainly to harsh winters and heavy truck volume. But in 1999, deficient roads fell from 17 percent to 11 percent, and the department expects to be down to 9 percent by 2004. HUMAN RESOURCES: B Years ago, Ohio’s collective-bargaining agreements surrendered a number of important management rights to labor. The state has slowly been getting back some of these concessions over the past decade. Most recently, the largest public union, the Ohio Civil Service Employees, agreed that selection for many of the jobs it covers could be based on performance, not just seniority. This was a crucial change. Language has also been added to union contracts giving management the authority to establish bonuses and incentive pay. But challenges remain. A couple of years ago, it appeared as though walk-in, computer-based testing would dramatically speed up the hiring process. While it has in Columbus, the state overall still moves slowly. Computer-based testing is now being spread throughout Ohio. The classification system also needs reform. And Ohio still has a big backlog of employee grievances, although its so-called “Judge Judy” hearings have helped cut back on time-consuming arbitration. MANAGING FOR RESULTS: B Ohio has somewhat decentralized its MFR effort. The individual agencies designate teams to delve into specific problems, identify areas for improvement and then implement solutions. Unions are a full partner in this process, which is pretty impressive in a tough-union state. Ohio boasts hundreds of major and minor accomplishments made through this approach. When agency performance reports are written, they are exhibited publicly. “Our department of education was considered to be the epitome of red-tape bureaucracy,” says Steve Wall, director of quality services. “They did this very revealing survey where they just got blistered. And they posted it on the Web. A lot of people looked at that courageous step and said, ‘This is a good thing.’ ” Unfortunately, the legislature hasn’t evidenced a strong desire to drive the budget with performance information. Efforts to develop a statewide strategic plan were slowed some years back when Ohio tried to impose on state government a methodology espoused by Procter & Gamble. Turns out, running prisons is way different from manufacturing soap. So, although strategic planning continues, the state won’t have a formal plan until sometime next year. INFORMATION TECHNOLOGY: B- A couple of years ago, IT managers in Ohio were talking enthusiastically about fast-coming improvements to enterprise-wide information systems. But things haven’t moved quite as quickly as anticipated; only now is the state beginning work on an entity-wide system that will cover financial management, human resources and capital management. It isn’t a moment too soon to get going. The 15-year-old accounting system is a relic. Also scheduled for replacement is a relatively new HR system that initially encountered resistance from the agencies. Ohio is now working toward a new set of procurement standards; over time, they will drive out non-standardized systems. Meanwhile, the state is ripe for upcoming procurement reform. “We recognized that the way our procurement policies were set up is based on procuring back in the 1970s,” says CIO Gregory Jackson. Data-sharing among agencies is a strength in Ohio. Its Multi-Agency Community Services Information System, for instance, is a collaborative program of the Mental Health Department, the Department of Alcohol and Drug Addiction Services, and 53 community boards to cooperatively develop a centralized information system through the state’s powerful telecommunications 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.