THE GOVERNMENT PERFORMANCE PROJECTReport Card: Pennsylvania FINANCIAL MANAGEMENT: A- Pennsylvania's revenues and expenditures remain neatly aligned, even as the state has enacted a number of recent business and individual tax cuts. Budgeters here are purposefully conservative on the revenue estimating side and generally accurate on the expenditure side (although Medicaid expenses were 5 percent over the estimate in fiscal year 1997). The state's Tax Stabilization Fund may not yet be up to the 5 percent recommended by the National Conference of State Legislatures, but it has been growing steadily, from 1.35 percent in FY 1997 to 2.6 percent last year and about 3.7 percent at the end of the current fiscal year. Equally important, the money goes in automatically, with 15 percent of any state surplus directed to the fund by state law. Both of the state's major pension systems are currently overfunded, and the state carefully manages and monitors its cash accounts to achieve yields that compare reasonably to those in the private sector. CAPITAL MANAGEMENT: B The relationship between Pennsylvania's executive and legislative branches is a little peculiar when it comes to capital management. The executive branch introduces a capital budget and attaches to it an order of priorities. Then the General Assembly adds all sorts of sparkling new projects to the list and enacts its own capital budget that includes its ribbon-cutting specials. In the end, though, the governor has ultimate control over which projects actually get funding, so quite a few of them never get done. Since 1968, $31.7 billion worth of projects have been authorized but only $9 billion have been completed. The commonwealth maintains a complete inventory of capital assets, and its asset assessment report is updated every two years with input from agencies. The state does not know how much routine maintenance is being done and how much is being deferred, because those appropriations don't show up as line items. However, capital budget analysts feel certain that there are no serious deferrals, because those would show up in the biennial survey of buildings. HUMAN RESOURCES: B Pennsylvania tried a decade ago to reduce its unwieldy collection of 3,000 job titles. That effort didn't succeed. Now, the state is working on a slow-but-steady strategy of improving the system as jobs are revised. As in many states, there's little central workforce planning here, but the central personnel office communicates well with the individual agencies, and detects problems quickly. When agencies reported a high turnover in their senior personnel staff, this prompted a statewide survey, revealing that 40 percent of all senior personnel managers will be eligible to retire within the next five years. The state created a new position on a managerial track that will help replace those retirees. Training appears to be relatively strong in Pennsylvania, with a solid emphasis on retraining employees for new jobs in government. A new training program aimed at management includes courses in strategic planning and educating employees about state goals and objectives. Pay schedules, unfortunately, are based on pay grade and longevity, not performance. MANAGING FOR RESULTS: B- Pennsylvania was a pioneer in its use of performance measurements, and has 25 years' worth of data in some areas. The measures are available in the budget, as well as on the state's Web site. The vast majority of this material is output-oriented, running against the trend in other states to pursue information that ties in with actual results. Leaders here believe the other states are the ones barking up the wrong tree. They argue that solid, verifiable measures of workload and other outputs are more than adequate for managing state government. The state conducts an annual review of all performance measures included in the budget, and agency program managers are responsible for producing accurate data. The governor has a mission statement and seven broad goal statements articulated in the executive budget. Otherwise, there is no strategic planning on a statewide basis. Cross-agency planning is used in a few fields, including criminal justice. On the department level, strategic planning is suggested but not required. INFORMATION TECHNOLOGY: B As part of a new effort, agencies perform cost-benefit analysis and draw up performance measures each year for proposed IT projects that run over $20,000. The following year, the projects are audited to see if the benefits are being delivered. "If you don't perform," the state warns, "you may not receive money in subsequent years' requests." There is no classic strategic plan for Pennsylvania information technology, though agencies develop independent plans with the help of the central office. The state does mandate specific goals, however. This year, every agency is required to develop two commerce-based electronic applications. The state also is developing a so-called "online shopping cart," which will allow agencies to see what vendors have to offer, order right from their desktops and ultimately have their accounts debited. Pennsylvania has received national recognition for its Link to Learn initiative, using information technology as a catalyst for improving education at all levels. Concern about IT and the schools has led the state to spend $2.3 million to make sure schools are Y2K-compliant—possibly the only state to launch such an extensive effort in this area. AVERAGE GRADE: B
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