THE GOVERNMENT PERFORMANCE PROJECTReport Card: Illinois FINANCIAL MANAGEMENT: B+ Partially because Illinois has a flat-rate income tax—far less volatile than graduated income taxes—its revenue estimates tend to be very accurate. After seven years of budgetary surplus, the state finally eliminated a long-standing general fund deficit (as calculated using generally accepted accounting principles). It also eliminated its $1 billion backlog of unpaid Medicaid bills in 1996. Having devoted so much of its time and money to digging itself out of fiscal trouble, Illinois still has no rainy day fund, but the state may consider creating one now. In any case, budgeters have taken care that current revenues and expenditures are nicely in tandem, so that it's not likely that the state will fall back into the red at any point in the foreseeable future. When the decision was made last year to add about $500 million annually in education funding, excise and utility taxes were raised in order to pay for it. Illinois provides managers who depend on its budget with clear, timely, accurate, useful financial reporting. It does not, however, give managers a great deal of flexibility with regard to their own spending. Agencies can transfer up to 2 percent of appropriations between line items without legislative approval, but that still seems rather constrictive. CAPITAL MANAGEMENT: B- Agencies submit annual capital requests to a Capital Development Board and to the Bureau of the Budget, and on occasion they also submit longer-range internal agency plans. The state does not have an overall long-range capital plan; it makes a solid case that it possesses the same information that other states provide in such a document. Even assuming that to be true, though, the information is not generally available to either citizens or legislators. The Capital Development Board does seem to do its work well. Its project managers monitor capital projects and report on their progress. Getting projects done on time and on budget hasn't been a problem. For replacement of assets, life-cycle cost techniques and cost-benefit analyses are used. Though the state does not calculate a total for deferred maintenance, agencies have a line in their operating budgets, labeled "permanent improvements," which is generally used for maintenance. This funding has remained steady. HUMAN RESOURCES: B Workforce planning has been ingrained in Illinois culture for decades. It was a strong priority with former Governor Edgar, who appointed a Human Resources Advisory Council early in his administration to analyze workforce needs and reform options. The state has been steadily whittling down the number of its job classifications (now a little under 1,000). It also is providing management with greater flexibility to alter job descriptions and pay without going through reclassifications. Illinois continues to do substantial qualification testing for job applicants and prepares eligibility lists based on those test scores. Fortunately, there are open-testing schedules for most job titles, so the lists are up to date and available to agencies on a timely basis. In a state that still suffers from widespread controversy over patronage practices, the seemingly old-fashioned testing system may have its place. The state also retains a so-called "absolute preference," given to veterans, which means that as long as a vet scores in the top grade, the vet gets the job. While solid arguments can be made that this is good social policy, it's stifling to personnel managers. MANAGING FOR RESULTS: C There are no statewide goals or strategic plans, and no legislative mandate for strategic planning by agencies. But, by tradition, most agencies—and all large ones—do engage in strategic planning. "I would not say they update it every year, but they don't ignore the process," says David Wood, former general counsel to the state budget bureau. Performance measures vary in quality from agency to agency, but are particularly strong in the departments of Human Services and Children and Family Services. From the legislative side, there hasn't been much pressure to develop better measurements for improved decision making. "It just hasn't been a priority in the legislature," says Wood. "There are political and other constraints involved." INFORMATION TECHNOLOGY: D+ Information technology has not yet become a management tool for budgeting at the agency level. The state does maintain a centralized accounting system, but about a quarter of the state's executive branch agencies—including some of the very largest ones—have thus far elected not to use it. The technology used in the personnel system, meanwhile, is old and needs replacement. Actually, there are three personnel systems—for benefits, payroll and other human resource activities. They tie into one another, however. Illinois is one of only a handful of states that doesn't have a department designated to the information technology function. The closest it comes is a bureau within the Department of Central Management Services. No surprise, then, that there's not a great deal of standardization beyond the requirement that new developments fit into the single state network. There is, however, a five-year strategic IT plan, updated each year, which leads the agencies in the creation of their annual IT plans. Procurement of major projects is somewhat slow, and the state doesn't require much in the way of return-on-investment or cost-benefit analysis outside of major outsourcing projects. AVERAGE GRADE: B-
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