THE GOVERNMENT PERFORMANCE PROJECTReport Card: Oregon FINANCIAL MANAGEMENT: B Oregon does almost all its financial management quite well. It is solid in cash management, long-term debt, financial reporting, multi-year planning, contract oversight, and other areas. The state did underestimate its revenues by at least 10 percent this biennium and last. But that was in large part because of capital gains in a strong stock market, and much faster growth than expected among its own corporations. "We had 50 percent growth in corporate revenue," says one budgeter. "We all said, `You can't project corporate revenues at that high a rate.'" Just a couple of years ago, budgeters worried that strict new property tax caps, combined with the state's refusal to enact a sales tax, would precipitate a serious fiscal crisis. Maybe someday, but not now. A weakness: the state's tiny rainy day fund—less than 1 percent of general fund expenditures. For the most part, agencies prepare for hard times by identifying lower-priority activities and suggesting 10 percent potential reductions in their budgets. This information could be used to keep the budget in balance in the event of an unpleasant economic surprise, but it is no substitute for an adequate rainy day fund. Governor Kitzhaber has suggested that money from the state's tobacco settlement ($70 million in the next biennium) could be set aside for rainy-day purposes. CAPITAL MANAGEMENT: B- When it comes to long-term planning, says Maynard Hammer, Oregon's capital investment section manager, "the needs are driven by votes." There's little doubt that he's right. Many of the state's major capital projects of recent years, such as its billion-dollar prison-building boom, have been generated by statewide ballot measures. Agencies do assemble six-year plans, the first two years of which help form the governor's budget proposal. There is no statewide six-year plan, but Oregon set up a capital division within the budget office three years ago to offer advice and expertise to agencies. Without any independent source of funding, it's difficult for some Oregon agencies to catch up with their capital maintenance needs. Buildings managed by the Department of Administrative Services have a rent program that provides maintenance money. HUMAN RESOURCES: C+ Oregon's decentralized human resources functions leave state government with little idea what its agencies are doing. For example, there is no centralized information about how quickly hiring takes place. About the only effective way the state communicates personnel policies to the agency level is through its Web site. Fortunately, much of what the agencies do on their own is pretty good. While Oregon has a traditional civil service system in many ways, with a range of different tests for different classes of employees, it does not place rigid limits on the number of applicants that managers can consider hiring. It appears that agencies are budgeting a reasonable amount for training, based on a state-announced benchmark that averages out to about one week of training per employee per year. Agencies do not generally use bonuses or performance-based raises, but they do seem actively involved in looking for ways to reward jobs well done—"even if it's just giving out coffee mugs," says one human resources analyst. MANAGING FOR RESULTS: B+ Nearly 10 years ago, the state put together Oregon Benchmarks—long-term goals and standards for achieving a higher quality of life and better state services. It was a pioneering effort that has led to countless similar initiatives in other places. In the mid-1990s, Oregon Benchmarks stalled as a result of opposition in the legislature. Now, it is well on its way to recovery. The current version—Oregon Shines II—is less ambitious but more realistic. The number of goals was cut from 300 to 100, and the ones that remain are more achievable (the state no longer aims to cut teen pregnancies in half in five years). About 90 percent of state government activities have outcome measures; agencies set targets and draw up action plans to achieve them. The state's "Benchmarks Blue Book"—a recent innovation—links the agency efforts to the benchmarks. The quality of the measures continues to improve, and to show tangible effects: Not long ago, for example, statistics revealed that chimney fires were the largest avoidable cause of fire deaths. The state began a chimney fire prevention effort. There are still shortcomings: Outcome measures are being used in budgeting decisions only in a limited way. There is relatively little validation of data. INFORMATION TECHNOLOGY: C+ Oregon's new CIO has moved a technologically laggard state forward rapidly. A five-year IT policy plan has been approved, taking in all branches of government and localities as well. The state controller has done a multi-branch business process analysis to explore areas that technology ought to support better or differently. The state's obsolete budget information system, originally scheduled for replacement in the 2001-2003 cycle, is now supposed to be completed in the next biennium. Oregon avoids specific IT standards, preferring to work toward an open architecture in which information technology is interoperable. However, the state has not yet achieved that vision. For all the emphasis on performance measurement, managers can't easily search for performance information across agencies. The database that would allow that is still in the process of development. AVERAGE GRADE: B-
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