Grading the States introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: Texas GOVERNOR Rick Perry (Republican, took office 2000) George W. Bush (Republican, 1995-2000) LEGISLATURE House — 78 Democrats, 72 Republicans Senate — 16 Republicans, 15 Democrats FINANCIAL MANAGEMENT: B+ The surpluses roll on year after year here, largely because of very conservative revenue estimates, which have been about 5 to 7 percent below the mark in the past two biennia. The same is proving true this time. For years, leaders appeared to believe that, because of the surpluses, no reasonably sized rainy day fund was necessary. Now the fund is growing fast: It recently received a $130 million infusion of cash from gas severance taxes. Then the comptroller decided to put in another $800 million in early January, racheting the fund up toward the 3-percent level. Long-term planning could be better; formal projections only go out through the next biennium. Texas has no unfunded pensions. It has improved its debt oversight and is now exploring more oversight of its capital leases as well. It has also improved its investment policies. Contract and procurement oversight are solid. There’s a great deal of financial information available to citizens here, but the state could do a better job of making that information understandable. CAPITAL MANAGEMENT: B Texas recently acquired a Unified Transportation Program, developed by the transportation department, which stretches over 10 years and separates projects into 34 categories. Projects get higher consideration if local governments can come to the table with some funding of their own. A three-member Transportation Commission then approves the 10-year plan. The plan holds the departments accountable for the future impact of current construction projects. So Texas can now boast of being one of the few states in the country that makes specific correlations between new projects and future operating and maintenance costs. What’s more, the George W. Bush administration pumped much-needed cash into maintenance of roads. Under prior administrations, maintenance usually just got leftover funding; now it’s a priority, backed by a new roadway-assessment program. On the facilities side, the state’s efforts are less coherent. While there is a relatively new statewide planning process, a great deal of analysis is still left to the agencies, which vary in the approaches they take. Formal criteria weren’t used in the development of this plan — although they’re supposed to be used in the next one — and some of the items clearly can be labeled “wish list.” So, while the legislature has a useful “big picture” look at state needs, it misses out on some of the detail. HUMAN RESOURCES: B Texas doesn’t have a traditional civil service system — agency managers are given a great deal of freedom to run their HR shops as they like. This makes some practices — like statewide work-force planning — more difficult. But Texas has made up for this gap, at least in part, by focusing its statewide effort on some specific problem areas. It has zeroed in on IT recruitment, setting up an academy that helps non-traditional recruits — English majors, for example — to learn the skills necessary for technical jobs. The answer to many questions about the quality of HR in Texas is that it varies by agency. A number of them do an excellent job in performance appraisal, recruiting and training. But others simply don’t. Agencies can offer pay for performance, and can give merit raises and bonuses. Those that do so are somewhat more attractive than others, and so “there’s a lot of cannibalism” of good workers, says one official. MANAGING FOR RESULTS: A- Texas’ MFR effort is nearing its 10th anniversary. It has survived changes in administration and in fiscal and political climate, while continuing to expand and refine its capabilities to improve state services. Recently, Texas has reduced the number of performance measures it tracks from 10,000 to 7,900. This is a step in the right direction, as it’s difficult to monitor and hold people accountable to 10,000. Even 7,900 is probably too many. On the other hand, the statewide plan focuses on a limited number of benchmarks and distinguishes between key and non-key measures. Performance data is audited on a periodic basis by the Texas State Auditor, who doesn’t hesitate to rule that particular measures cannot be certified as accurate. Most agencies focus their budget presentations around past and projected performance, and legislative finance and appropriations committees actually vote on specific measures and targets during markup. But, in this deeply decentralized state, the understanding of the measures throughout the agencies themselves is a mixed bag. Says Ara Merjanian, former group director for planning and development, “I’ve talked to people in the agencies who were very conversant with these efforts and others who don’t even know it’s happening.” INFORMATION TECHNOLOGY: B- Many Texas agencies run independent IT systems that are similar in function and tend to duplicate one another. Some progress has been made at cutting down on redundancy, but the state has a long way to go; and the process of altering technology in so many huge agencies is far from cheap. At least as significant as system redundancy is the wide variety of databases, which makes information sharing difficult. That said, the state’s Project Justification System — now housed in the legislative branch — is strong relative to other states. Oversight of implementation is effective as well. One quibble: Rigorous scrutiny is limited to projects over $1 million, and that’s a high threshold even in Texas. In 1999, the legislature enacted a law that requires most agencies to develop a plan for accepting forms or payments from citizens via the Internet or other electronic means. The state’s Internet portal opened last summer, and the number of transactions on it is mushrooming by the week. 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.