GOVERNOR
Tom Ridge (Republican, elected 1994)
LEGISLATURE
House — 104 Republicans, 99 Democrats
Senate — 30 Republicans, 20 Democrats
FINANCIAL MANAGEMENT: A-
Pennsylvania sticks to what works. Its financial management practices are strong, and largely have been established for decades. Revenue and expenditure estimates are accurate, and the rainy day fund will exceed 5 percent by the end of fiscal 2001. Financial projections go out five years ahead, and the budget is balanced into the out-years. The financial impact of all major legislation is analyzed carefully.
The commonwealth also does an excellent job on contracting and procurement. Agencies evaluate and score vendors during the life of a contract, and make those scores available online. Past contracts are carefully evaluated so that previous mistakes don’t occur again.
The state’s investment managers were given more freedom in their investment options a couple of years ago, and are just now beginning to utilize this capacity. The state has also been held back to some extent by old financial management technology, which is now being updated.
CAPITAL MANAGEMENT: B
The biggest strength here is in central evaluation and monitoring of projects as they move forward. Monthly progress reports and annual expenditure reports are produced, and the legislature is given periodic project updates. The Department of Transportation tracks its construction projects day to day through its 11 district locations. The central office maintains a real-time database from which it can check project status.
Budget approval for new capital projects is based on a comparative analysis that measures engineering standards, operating costs, and useful life against project alternatives. This is an innovative approach, but there’s been some resistance to it. “We are dragging many agencies kicking and screaming into it,” says Gene Beeman, the Budget Office’s capital coordinator.
The big weakness here: maintenance. It’s funded entirely from the operating budget, with no dedicated funding sources. As needs arise, agencies determine how to address them, with little in the way of central control.
HUMAN RESOURCES: B+
Governor Ridge’s leadership in human resources management has brought results. Training is excellent and features a wealth of managerial courses, a lecture series for executives and computer-based and online training to deal with the state’s geographic spread. The commonwealth has one of the lowest employee turnover rates in the country — 7.2 percent in fiscal year 1999.
Pennsylvania has pioneered alternative methods of resolving grievances, and has dramatically cut down on the number of cases that go to arbitration. Labor and management have been working reasonably well together; the most recent round of contract negotiations resulted in early settlements and four-year contracts rather than the traditional three-year ones.
Hiring could be speedier. It takes a bit too long for applicants to get on lists for required exams, particularly in testing centers outside major cities. Candidates can wait as long as three to seven weeks after applying until they are tested, and up to four weeks to receive scores. New automated systems are supposed to improve this in the next couple of years.
Although Pennsylvania has nearly 3,000 job titles, officials insist that they are constantly scrutinizing the classification system and making changes when necessary. For example, a new class and pay system was instituted in 1999 for information technology positions.
MANAGING FOR RESULTS: B
Pennsylvania relies upon its budgeting process — and a well-refined performance measurement effort — to move toward its goals. The state’s leaders argue that the budget effort substitutes effectively for a more traditional strategic plan; and it’s hard to disagree. The budgeting process is thorough, rigorous and gets deeply into the policies that would otherwise be covered in a strategic planning document. The Legislative Budget and Finance Committee has a well-respected professional staff whose reports are trusted and relied upon throughout state government.
The commonwealth doesn’t use outcome measures nearly as much as many other states do — and may miss out on some analysis that outcome measurement makes possible — but outputs are tracked rigorously, and managers defend themselves by saying that it’s easier to hold an agency accountable for a specific output than for a broad outcome.
The Keystone State could benefit from agencies reporting publicly on their success in achieving targets. But that simply doesn’t happen in the budget process.
INFORMATION TECHNOLOGY: B+
There’s an impressive mantra in Pennsylvania with regard to its IT operations: “If you don’t perform, you don’t receive money.” With that in mind, the state has done a better job than most at measuring the costs and benefits of major IT projects — and it tries hard to make certain that those benefits are actually delivered.
The state has cut its procurement time by virtually eliminating requests for proposal. Vendors are pre-qualified, and then turned loose to do the hard work of developing project specifications on their own. A number of other states have inquired about this sensible process, and it may be a trend for the future.
Pennsylvania was one of the first states in the nation to have a genuinely integrated set of entity-wide IT systems for financial management, procurement and personnel, among other functions. That means that its technology is now getting to be out of date. As a result, it has embarked on a $175 million project to install new, totally integrated systems.
Given the state’s propensity for moving ahead of the pack in many areas, it’s a little surprising that it’s currently a bit behind the leaders in providing transactions online. More of these are said to be coming in the next year.
AVERAGE GRADE: B+
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