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| C+ | Hawaii |
• Population (rank): 1,285,498 (42)
• Average per capita income (rank): $27,251 (11)
• Total state spending (rank): $8,913,697,000 (38)
• Spending per capita (rank): $6,934 (6)
• Governor: Linda Lingle (R)
• First elected: 11/2002
• Senate: 25 members: 21 D, 4 R
• Term limits: None
• House: 51 members: 44 D, 7 R
• Term limits: None
For decades, Hawaii has had a law requiring state budget writers to employ real results-based information. And for decades, that requirement has been essentially ignored. "Even when agencies purport to have measurements," says State Auditor Marion Higa, "those tend to be fiction."
There's little doubt that Hawaii's budgeting methods leave something to be desired. A recent series in the Honolulu Advertiser questioned whether campaign donations by nonprofits had significantly influenced legislative decisions over which nonprofits to back with state funds. Those are relatively small budget items. But ethical questions have been raised about spending procedures for the much larger capital budget, as well. The legislature is looking at changes in the means used for selecting capital projects "so there's no appearance of impropriety," says House Finance Chairman Marcus Oshiro.
Even if the state improves at choosing how to spend infrastructure dollars, it still must come to grips with an unavoidable geographic truth. The regular torrent of natural disasters, including mudslides and earthquakes, requires greater attention to maintenance than the state currently demonstrates. Hawaii has a $187 million backlog of deferred road maintenance. A new project examining the energy efficiency and maintenance procedures of state buildings shows promise, but as in the case of roads, the real solution has to be a transition to lasting life-cycle funding.
Hawaii's information technology could use some bulking up, too. A recently instituted IT governance team should help set the agenda for investment, but the state needs to use that governance model to systematically modernize and standardize its IT. Right now, a datamart allows disparate agency systems to interface with the old mainframe financial system — a smart workaround but not a long-term solution.
On the personnel front, Hawaii has used targeted salary increases as a means for attracting workers to hard-to-fill positions. A new online application system also has helped to increase applications by about 30 percent since 2005. All of this is linked to the state's broader programs to combat out-migration — one to keep Hawaiians in-state and another to lure them home from the mainland — using tactics ranging from high school visits to job fairs to headhunting Web sites. Although much is being done to recruit employees, better workforce planning is still needed to make the best use of them once they arrive.
The Procurement Office has a different kind of people problem — too many people are purchasing and not enough people are reviewing the purchases. Without sufficient staff to analyze purchasing data, the state is foregoing easy savings, especially on big-ticket items.
One managerial success story in Hawaii can be found in its Department of Human Services. Since 2003, Director Lillian Koller has transformed an insensitive agency that was removing children from their homes at four times the national average without appreciable safety benefits. A differential-response approach — treating lower-risk cases with a more comprehensive assessment of family needs than the strict investigative model allows — has dramatically reduced the number of children entering foster care. And almost $10 million of federal welfare grant money that sat unused every year is now directed to programs such as Hui Ho'omalu, a partnership of community providers that recruits better foster parents, leading to increased adoptions and family reunification. Continuous quality improvement goals, more stringent than federal requirements, have improved caseworker response time and brought re-abuse rates down.
One of the biggest obstacles Human Services has faced is an IT system described as a "complete management albatross." But Koller has found a way around it by forging a partnership with Maui Community College, using students to develop an entirely new system. This seems to be getting the department just what it needs at a fraction of the ordinary cost. It's hard to argue with that.
For additional data and analysis, go to pewcenteronthestates.org/gpp.