Grading the States introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: West Virginia GOVERNORS Bob Wise (Democrat, elected 2000) Cecil Underwood (Republican, 1997-2001) LEGISLATURE House — 75 Democrats, 25 Republicans Senate — 28 Democrats, 6 Republicans FINANCIAL MANAGEMENT: B- Two years ago, Governing reported that “West Virginia is making a commendable effort to get its house in order.” That was certainly true, although there’s still a fair amount of dust on the lampshades. The state is one of the few that had trouble estimating corrections spending the past couple of years. That area ran about 6.6 percent ahead of budget in FY2000. The state could also use a longer outlook in its expenditure projections, and its fiscal-notes process has some holes — a careful analysis is done only if the legislature requests it. Most of West Virginia’s fiscal problems are the result of mistakes made in the distant past. The annual bill for state support of the severely underfunded teacher retirement system is 10 times what it would be if contributions had been made properly in prior years. At one point, the system was only 9 percent funded. Now it’s up to 25 percent. That hasn’t been easy. Another bragging note: The unreserved, undesignated balance in the state budget has been going up steadily since 1995. Half of the surpluses automatically go to the rainy day fund, which has stayed stable at 3 percent of general fund revenues. And with the exception of corrections, the state has been reasonably good at estimating current expenditures and revenues. CAPITAL MANAGEMENT: C West Virginia doesn’t have a long-term plan for capital management. A two-year statewide capital budget is presented to the legislature annually. The legislators don’t change many of the governor’s recommendations, although they regularly add a few pork projects. Estimates are made of the extent to which capital construction will affect future expenses, but these aren’t really utilized in determining which projects are recommended for funding. West Virginia’s Department of Transportation does a pretty good job at providing maintenance money. Funds come from dedicated tax revenues, so no general funds have to be used. Thanks to vehicle prices and sales increasing over the past several years, the maintenance fund has been growing. About $230 million is going toward road maintenance in fiscal 2001. On the facilities side, maintenance is a bit weaker. Generally, says one planning official, maintenance funding is “probably adequate to the low-side of adequate” in all areas except the Capitol. Funding for the Capitol complex, he says, is “reaching the point where anything we do is a major budget item.” But the legislature has been loath to appropriate the necessary money. HUMAN RESOURCES: C+ Exploring HR in West Virginia is like driving some of its roads; the process is full of ups and downs. On the upside, training is good; this is one of the few states that can actually say with certainty how much it spends on training, because finance officials code those costs consistently across state government. West Virginia also deserves credit for keeping up with salary adjustments to aid in recruitment and retention. In 1999, pay-grade increases were made for 701 of the state’s 821 job titles. Now for the downward trail. Rigid civil service rules inhibit managerial flexibility in picking job candidates. Although testing is largely automated, rules require a 10-day internal posting period, which keeps the hiring process slow. And here’s a quick turn: Agencies are allowed to award merit increases and salary adjustments. But they have to find the money in their own budgets. As a result, the wealthier agencies pay better than strapped ones, and this leads to poaching. “One agency becomes a training ground for others,” laments Dot Yeager, of the Department of Administration. MANAGING FOR RESULTS: C West Virginia hasn’t made giant strides here, but at least its managers are growing accustomed to the idea that performance measurement isn’t just a passing fad. Although its measures have only marginal effects on executive- and legislative-branch budgeting, they are utilized in the agencies, for example, to help agency secretaries move cash efficiently between programs. Since state leaders are reluctant to add to agency allocations, this prioritizing process is crucial. The quality of the state’s measures — and the use of targets — varies substantially between agencies. Each agency draws up a mission statement and goals, and about half the programs also use genuine performance measures — tracked from 1997. But the majority of the measures cover outputs, not outcomes. There is no statewide strategic plan, although the governor generates a set of goals and objectives he wishes to be accomplished during his term. Agencies develop their own strategic plans, with varying degrees of success. “There’s probably a wider spectrum than there should be,” concedes one official. INFORMATION TECHNOLOGY: C- There’s a curious anomaly here. West Virginia has one of the most stringent procurement policies in the country. Central authorities must approve any technology purchase over $10,000, which slows the process dramatically. At the same time, the state lacks much capacity to oversee other, perhaps more important, elements of IT. Once a procurement has been approved, there’s minimal central oversight. In the past couple of years, the Underwood administration made genuine efforts to bring the state into the modern IT era. But there were lots of problems. The purchase of a new off-the-shelf human resources information system, for example, never really got off the ground. So the state stepped back and decided to build its own, in-house, and that will not be ready until later this year. Standards for acceptable purchases exist, but they need to be updated and made more comprehensive. And the state needs to hire more staff to address its technology needs. In particular, it needs a formal CIO position. 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.