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| D+ | New Hampshire |
• Population (rank): 1,314,895 (41)
• Average per capita income (rank): $28,828 (6)
• Total state spending (rank): $5,987,952,000 (45)
• Spending per capita (rank): $4,554 (35)
• Governor: John Lynch (D)
• First elected: 11/2004
• Senate: 24 members: 14 D, 10 R
• Term limits: None
• House: 400 members: 237 D, 158 R, 1 I, 4 Vacant
• Term limits: None
There is a myth that New Hampshire's fiscally conservative state culture creates frugal but fit government — no taxes, no frills, no problem. In truth, while New Hampshire may provide fewer services than other states, the notion that its finances are emblematic of old-fashioned New England Puritanism just isn't true. Meager cost and performance information and tortuous business processes create an institutional inertia that wastes much of the state's limited resources.
The governor, who serves a two-year term, doesn't necessarily appoint — and cannot remove — his own agency heads, who serve four-year terms. So the governor can spend lots of time banging heads with other members of his own cabinet. "The basic system of government is designed to make it difficult to transform anything," explains one former state official.
In New Hampshire state government, it can even be tricky buying a bunch of file cabinets. If a manager wants to purchase something that costs more than $5,000, the deal not only has to go through a central purchasing office but also must get approval from a five-member elected board known as the Executive Council. Hundreds of items have to be reviewed every few weeks, including some out-of-state travel. Much work gets held up until the council meets and approves expenditures ranging from $60 million for a new management information system to a $930 trip to Delaware for three Fish and Game officials. To be sure, such controls protect the state against fraud — and that's a good thing. But at what cost?
The problem isn't only in the structure of government; it's in the process of getting information to the people who most need it. A particularly egregious example: One director whose job deals with institutional and employee improvement stepped into her office on Day One to discover that her predecessor had taken every single document when he left. That may be unusual, but antiquated technology producing hard-to-use data definitely is common. The state's old computer systems spit out so many numbers, with such minimal explanation, that the information often is of little value for analytical management.
State officials are awaiting the arrival of an enterprise resource planning system as the state's IT salvation, but new machines don't necessarily change the way people use information. Making the system operate effectively will be as much a workforce-training issue as a tech issue. There is cause for concern here, especially given the fact that the state initially managed the ERP implementation on a volunteer basis, dedicating full-time staff to the project only after it was delayed by more than a year.
Among New Hampshire's most troublesome issues is a tendency to push to tomorrow that which should have been done yesterday. Decisions about how to comply with court rulings ordering more equitable school funding have dragged on for nearly a decade. Another example: When Charles O'Leary, the former commissioner of the Department of Transportation, came out of retirement to fix the department's finances, he announced that the state's 10-year transportation plan would actually take 35 years to complete. He sliced $1 billion of the least worthy projects; the new plan, which has not yet been approved by the legislature, would take 22 years to complete.
In addition, underfunding and lack of clear priorities for buildings, bridges and roads leaves New Hampshire with "killer" deferred maintenance problems and positively pre-modern infrastructure: The average daily temperature in January is 17 degrees, but many hallways in the New Hampshire Department of Corrections have no heat — employees cling to space heaters in some offices.
There's a philosophy in the Granite State that constant fiscal crisis helps keep the state efficient. However, without strategic planning, performance information or even timely expenditure data, how does New Hampshire know where efficiency ends and strangulation begins? The Budget Office — actually, the budget director, since there's just one person in the office — is mired in the same Catch-22 as the rest of the state: stretched too thin today to prepare for tomorrow.
For additional data and analysis, go to pewcenteronthestates.org/gpp.