Grading the States introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: Oregon GOVERNOR John Kitzhaber (Democrat, elected 1994) LEGISLATURE House — 33 Republicans, 27 Democrats Senate — 16 Republicans, 14 Democrats FINANCIAL MANAGEMENT: B- A long-parade of ballot-box initiatives has tied the hands of Oregon budget-writers and made it difficult to keep the books in balance. Last November, voters renewed the practice, passing several initiatives that cast “a huge cloud over the state,” in the words of Chuck Sheketoff, of the Oregon Center for Public Policy. One new voter mandate allows a higher deduction from state taxes for federal taxes paid. That should cost $159 million in the coming biennium. A second initiative, now in the courts, requires the state to pay landowners when regulations cause property values to drop. Nobody can guess how much that will eventually run. The state has a law requiring it to send back any collected revenues that are more than 2 percent over projections. That amounts to a hefty $323 million giveback in the next biennium. This makes budget-balancing tough and stops the state from setting money aside for the future. This is one of the few remaining states with no rainy day fund. When Oregon’s taxpayers are able to restrain themselves from fine-tuning fiscal policy, things run pretty well. There’s good centralized oversight of debt and investment, strong financial controls, fully funded pensions and fine financial reporting. Agencies prepare six-year spending plans, and the state Office of Economic Analysis avoids politics in its approach to revenue estimating. CAPITAL MANAGEMENT: B- Yet another initiative last November would have stripped the marrow out of the state’s capital budget bones. Fortunately, it failed to pass. Agencies here initiate, plan, evaluate and implement their own capital plan requests. Four-year plans are updated and submitted to the Capital Projects Advisory Board every two years. The state does a reasonable job of monitoring and evaluating projects through to completion. The weakness here is prioritizing maintenance. Until recently, agencies conducted their own condition assessments. But they used different methods and standards and that led to information that was difficult to utilize statewide. “The legislature and governor have no mechanism to prioritize who’s in the worst shape,” says one official. “It gets down to the squeakiest wheel that happens to ask the loudest.” To develop a more consistent approach the Advisory Board is conducting a statewide condition assessment. HUMAN RESOURCES: C Employee turnover is high in Oregon. The compensation system does not provide many opportunities to reward performance. The state’s classification system does better, with a relatively small number of titles and an ongoing effort to keep the job titles current and sensible. Employee training is mostly decentralized. Some agencies do a great job. Others lack the money even to send supervisors to basic courses. The state asks agencies for a training report every two years, but otherwise centralized information is scanty. As a result, duplication of training efforts is a concern, although an informal statewide trainers network may help. Recruitment has become increasingly decentralized as well, with both positive and negative effects. “Agencies and managers want to do their own thing. They forget about the law and you have to reel them back in,” says Lisa Snively, recruitment supervisor. On the other hand, she says, since applicants now apply to a specific agency for a job — instead of a job title that could wind up anyplace in the state — the matchup between applicant and position is getting more efficient. MANAGING FOR RESULTS: B A decade ago, Oregon’s performance measurement system was thoroughly standardized. The hope was that agencies would use the same model and system for measurement, with a common display format. The agencies resisted and were given latitude to use approaches and measures they considered appropriate to their culture and program needs. “I think the pendulum swung too far in letting them do what they wanted,” says one state official. Oregon didn’t have a common language with which leaders could utilize performance information. Now the state is working hard to move toward a middle ground, with an entity-wide database of measures and common definitions. This won’t guarantee that the legislature will make better use of the measures than it has in the past, but at least legislative fiscal staff will have access to statewide information in a way that would have been very difficult two years ago. And, unquestionably, Oregon generates much useful data. Notable is its use of county rankings for issues surrounding crime, children, education and the economy. Oregon is leading the country in disaggregating data and allowing counties to benchmark against one another. INFORMATION TECHNOLOGY: C Oregon’s obsolete information systems are in various stages of overhaul. The budget system is being replaced. The financial management system has already been replaced. The system for human resources continues to be used, but it’s pretty much worthless for any kind of analysis. A few years ago, the state looked at an entity-wide solution to these problems, but the new financial management IT system alone cost $30 million, and the legislature simply wasn’t ready to authorize another big effort. Major projects here (defined as $500,000 or more) are tracked bimonthly for the Joint Legislative Committee on Information Management Technology. Any project delays or cost overruns are scrupulously explored. That’s good. And the state is adapting a new, Web-enabled tool that will allow the legislature to examine progress on major projects at any time rather than waiting for reports. Unfortunately, once IT systems are in place, the state does little centrally to make sure the benefits promised are being delivered. AVERAGE GRADE: C+ 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.