Grading the States introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: Alabama GOVERNOR Don Siegelman (Democrat, elected 1998) LEGISLATURE House — 68 Democrats, 37 Republicans Senate — 24 Democrats, 11 Republicans FINANCIAL MANAGEMENT: C+ After decades of abysmal practice, Alabama has finally introduced long-term fiscal planning into its budget process. It isn’t exactly an ideal system; the executive and legislative branches both draw up revenue estimates, and they more or less split the difference. But merely entering the world of revenue assessment represents a giant leap forward over the state’s previous drunken-sailor method of simply opting for the higher estimate. Projections of Medicaid spending have long been a problem. In fiscal 1998, spending was 8 percent over estimates, and in 1999, it was 3 percent over. The 2000 budget was much more realistic in this and other areas, and a trust fund has been set up to protect against Medicaid surprises in the future. Investment and debt and procurement management are difficult to evaluate in this state; they’re all in transition, with new policies and practices in development. One interesting change: The state is starting to recognize the benefits of using cost accounting to make contracting decisions. For example, instead of paying contractors $150 a day for each youth offender, it has now priced out different levels of supervision and care, bringing down the price for less severe offenders to $89 a day. CAPITAL MANAGEMENT: D+ Alabama is trying to develop a comprehensive capital program. To say they have not had one in the past is being kind: When the Siegelman administration took office, the state didn’t even have a list of the buildings it owned. The only thing remotely resembling a plan was the state budget itself. Now, the Department of Finance has been placed in charge of drawing up a legitimate planning document, and is supposed to have it ready for the governor by fiscal year 2002. Coordinating the capital planning of Alabama’s individual agencies is a challenge. Each one has always prepared its own blueprint in its own different format, and used it to fight political turf battles. The agencies seem to be going along with the governor’s current drive to rationalize the system, but they are moving very slowly toward creating joint projects and consolidating space. Alabama doesn’t have a good system for tracking new construction, although that’s not much of a problem right now, because it isn’t building anything of note. The state is spending too little on maintenance, but neither the governor nor the legislature seems ready to confront the need for far more cash. HUMAN RESOURCES: D+ “The administration has not put personnel issues on the front burner,” admits the state’s deputy finance director, James Bryce. It shows. Improvements have been sparse, at a time when other states are churning out reforms. There is little long-term work-force planning, and hiring a new employee takes twice as long as it does in most other states. Sometimes longer. A year ago, the personnel director for the state finance department was looking to hire seven printers. He requested the certified registry of printers who had passed the required exam. The list was eight years old, so a new list of eligible candidates had to be developed. The needed printers still aren’t on board. Training is decentralized in Alabama, and while there are some good elements, there is scanty information available systemwide. “As far as systematic development of managers, I must admit that we’re really lacking,” says Bryce. A new performance appraisal system was implemented, but still needs work — particularly in strengthening the link between goals of individual employees and those of the agencies they work for. MANAGING FOR RESULTS: D+ Two years ago, Alabama was an abject failure in managing for results. It didn’t even try. Against any other background, the current state of affairs wouldn’t look so hot. Measures and targets are just being created, and there is little ability to validate the information that’s gathered. Still, it’s progress, thanks in large part to pressure from the governor. He’s pushed for an annual strategic plan that will help drive budget decisions, and his office is coordinating efforts in the agencies to make sure their plans reflect the entity-wide agenda. The clearest progress has been in three pilot agencies: Mental Health, Youth Services, and Human Resources. These three are moving from a melange of output measures that were never used by anyone, for management or budgeting, to outcome measures that will be used for both. Not by coincidence, all three departments have had serious problems with federal court orders — and the state has already seen evidence that strategic plans help keep the judges off its back. The pilots will gradually be expanded to more agencies. INFORMATION TECHNOLOGY: C- There’s an ongoing battle here between the central government and the agencies to seize control of information technology. The governor is firmly on the side of the central IT office, and right now the betting is that he will win. Still, agencies that have their own sources of income — those that don’t need to depend on general fund dollars — are going to be hard to move. The central IT authority tracks projects that cross agency lines, and that’s good. But many agency-level efforts are just tracked within the agency itself. “Until it really screws up, nobody outside of the agency will know it,” says one observer. Alabama is working hard to make the data from its statewide financial management systems more easily available to managers. Later this year, if all goes as planned, managers will no longer need to go to information technology specialists to run financial reports; they’ll be able to do it themselves. AVERAGE GRADE: C- Copyright © 2001, Congressional Quarterly, Inc. Reproduction in any form without the written permission of the publisher is prohibited. Governing, City & State and Governing.com are trademarks of Congressional Quarterly, Inc.