THE GOVERNMENT PERFORMANCE PROJECTReport Card: New York FINANCIAL MANAGEMENT: D+ For years, New York was able to balance its budget only through one-time revenue gimmickry. The use of such gap-fillers has declined dramatically, and the state finally appears close to balance. What's more, its managed investments are finally guided by written policies. That's the good news. But the bad news takes considerably more space to report. New York hasn't taken advantage of its healthy economy to prepare for future downturns. The state's rainy day fund is capped at 2 percent of general fund expenditures, probably the lowest cap of any state that has a fund at all. Surpluses have been used not to pay down debt but to introduce long-term tax cuts, which are almost certain to cause problems eventually. And the debt load is titanic. By 2000, New York's debt service of $4.2 billion may be larger than its projected capital spending. Steps to cut the debt have slowed its growth rate, but not nearly enough to solve the problem. As the comptroller reports, with at least a touch of understatement, New York "has future budget gaps it must face." Meanwhile, the budgeting process itself is still troubled. Partisan wrangling causes the budget's passage to be late every year. In 1998, Governor Pataki vetoed 1,379 provisions the legislature sent him; despite this, he signed the budget only 24 days after the statutory deadline. Usually, the delay is much worse. In any event, supplemental appropriations are often necessary. A pretty good symbol of New York's fiscal problem: In 1995, when the state created a committee to try consensus revenue estimating, it was informed that "the committee can reach no consensus." CAPITAL MANAGEMENT: C- New York does a reasonably good job of tracking projects and making estimates. Agencies submit five-year plans, complete with budget requests, assessments of capital program needs, long-range fiscal projections and analysis of financing. These are rolled up into a statewide Capital Program and Financing Plan. Legislators complain, however, that the only information they get is a computer printout of the projects with no information about scheduling or justification. "It's a black box," says one observer. The state does maintain an inventory of buildings and fixed assets for most—but not all—agencies. But while the agencies are required to do periodic condition assessments, the state lacks systems to determine renovation and repair needs. HUMAN RESOURCES: C The Pataki administration has taken what may have been the most antiquated, cumbersome, convoluted personnel system in America and brought it to the brink of respectability. New York has updated its tests and scoring systems; begun recruiting aggressively for hard-to-fill jobs; given managers more flexibility in hiring; developed a comprehensive online job application and listing service; and broadened its job classifications. However, there's a lot of work remaining to be done. There are still 5,000 job titles—too many even for the second-largest state in the country. Agencies hire from a list of transfer/reassignment candidates, but if none of those work out, they are limited to choosing among the three highest exam scores (plus ties). Finally, while classification and hiring have improved, the state still takes a rather rigid approach to motivation and reward. Unions remain more interested in grievance procedures than in helping to make the new performance-appraisal system work. MANAGING FOR RESULTS: D+ There is no real statewide strategic plan in New York. Agencies create their own plans, with a wide variation in quality. The State Board of Regents, to its credit, has a plan and specific goals and strategies for meeting it. But other agencies are preparing little more than mission statements or puff pieces without targets or strategies. A statewide effort to require performance measures was a dismal failure and was formally repealed in 1992. The Pataki administration says it is committed to expanding the use of performance measures, but after four years in office, there's no central initiative, and performance-based approaches have been adopted only sporadically by individual state agencies. For example: the Department of Motor Vehicles clearly has a reasonable array of output and outcome measures in place. The State Police, on the other hand, still rely rather clumsily on numbers of arrests and citations issued by category and type. INFORMATION TECHNOLOGY: C New York created an Office for Technology in 1997. Its director serves as the state's chief information officer and reports to the director of state operations. The OFT is enacting "preferred standards," which agencies are expected to adopt over time as their systems change or they make major modifications. New York is developing a new human resources information system, too, which will help. Meanwhile, however, the state has numerous independent systems for financial management, human resources and capital management, and they use a bewildering variety of platforms, software and data formats. Telecommunications and data communications are not integrated throughout the state, though the OFT is coordinating a project to create a statewide intranet that will support data voice and video for state and local government. OFT also is beginning a multi-year project to consolidate 24 data centers. On the positive side, training for IT professionals in all agencies is provided as part of a statewide plan in New York, and the state is well known for the quality of its technology workforce. There's some use of cost benefits in the RFP process. AVERAGE GRADE: C-
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