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| C+ | Montana |
• Population (rank): 944,632 (44)
• Average per capita income (rank): $21,067 (42)
• Total state spending (rank): $5,194,561,000 (46)
• Spending per capita (rank): $5,499 (19)
• Governor: Brian Schweitzer (D)
• First elected: 11/2004
• Senate: 50 members: 26 D, 24 R
• Term limits: 8 years (consecutive)
• House: 100 members: 49 D, 50 R, 1 I
• Term limits: 8 years (consecutive)
You'd think that a projected surplus of $1 billion — about half of the state's entire budget — would make for an even-keeled budget process. Not in Montana, where revenue forecasts exceeded planned expenditures by that much in 2007. The state's budget processes themselves aren't particularly troublesome. But term limits have made the Montana legislature a hothouse, as dozens of new lawmakers, untutored in the ways of fiscal negotiation, debated their way last year into the most tempestuous budget sessions in memory. Thanks to partisan acrimony about property-tax relief, the budget had to be split up into several different bills during the session.
Legislators tried to put their Humpty Dumpty budget back together again, but couldn't make the pieces fit without a last-minute special session. This led to a mixture of seemingly inconsistent decisions. On the one hand, the state sensibly put some of its large surpluses toward proposed fixes for infrastructure maintenance. At the same time, though, a bill to fund maintenance on a permanent basis died. Similarly, while $100 million of the surplus was placed in reserve, Montana remains one of only four states with no real rainy day fund. A fund exists, but there is no statutory requirement to maintain a balance in it beyond the current biennium.
That's a noteworthy issue in a state such as Montana, where revenues are extremely volatile because they rely heavily on the price of natural resources. True, the economy has begun to diversify a bit — but a good share of the state's revenues still comes from mineral extraction. Meanwhile, the inevitability of an uncertain future points to the need for a statewide strategic plan — one that emphasizes the funding of technology and human capital steadily through both booms and busts.
Better performance information could help Montana to make sure it spends its money most wisely whether times are flush or hard. Ideally, such information could even help de-politicize the process that led to the recent budget mess. But performance information hasn't gained a foothold in the state. Isolated pilot programs spring up, but budgets are not linked to long-term performance goals.
On the technology front, Chief Information Officer Dick Clark takes justifiable credit in the funding of two new data centers, as well as upgrades to the social services data system, in the state's capital budget. "We now see IT as an asset," he says. "We did a fundamental change in the way we think about IT." But the presence of an asset doesn't necessarily mean that it's used. Some agencies do not take full advantage of available training in information technology resources, and the budget office sometimes finds that agency managers don't know how to access the information available to them.
The state's director of personnel is making a valiant effort to focus attention on workforce planning. Montana's strong economy makes recruiting and retaining employees a challenge as private-sector jobs lure young men and women toward corporate payrolls with generous salaries. A market-based, broad-banded initiative called PayPlan 20 was developed to respond to that problem by matching private-sector salaries and by instituting targeted pay-for-performance raises.
But despite the best intentions of the HR office, the legislature isn't making life easy. The reasonable notion that employees should get performance-based raises has been stymied by a 0.6 percent limit on the increases. Another example: HR officials, concerned about succession planning, wanted to purchase a computer system for that effort — and it was supposed to pay for itself within four years. But the legislature decided not to fund the purchase. That's troublesome news for a state in which 20 percent of the workforce will be eligible to retire in the next three years.
For additional data and analysis, go to pewcenteronthestates.org/gpp.