Grading the States introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: Iowa GOVERNOR Tom Vilsack (Democrat, elected 1998) LEGISLATURE House — 56 Republicans, 44 Democrats Senate — 30 Republicans, 20 Democrats FINANCIAL MANAGEMENT: A- Iowa budgeters are belt-and-suspenders people. They don’t take any chances. There are two well-stocked rainy day funds, and clear priorities for their use, which would be more than enough for many states. But Iowa also has a well-established practice of appropriating 99 percent of its annual revenues, leaving the last 1 percent for unanticipated events. And, of course, in state government, you can always count on the unanticipated. For example, general fund revenues came in slightly under estimates in fiscal 1999 — largely because personal-income- and sales-tax cuts had a larger impact than predicted. “It’s hard to estimate taxpayer behavior,” says Randy Bauer, the budget director. “When we look at the baseline and how personal-income tax did in the period after the reduction, there was probably a $20 million to $30 million difference.” This isn’t really a big chunk of Iowa’s budget, but it’s encouraging the state to put more effort into tax analysis before making any other changes. Iowa has also determined that it needs better efforts to improve contracting decisions. Formal bidding is required at the unusually low level of $5,000, but the state has made very aggressive use of master contracts — so agencies can often buy goods or services from already existing contracts. CAPITAL MANAGEMENT: B+ Iowa has made real progress at tracking the condition of its infrastructure. In 1999, the state set up a capital project advisory committee and completed a comprehensive inventory and assessment of its buildings and facilities. State leaders knew that this was important work. Until recently, routine maintenance was funded from operating budgets, which tended to let backlogs build up. “A lot of the departments have been using a shoestring budget on maintenance and repairs,” says Michael Moreland, a member of the Vertical Infrastructure Advisory Committee. Not surprisingly, the new assessments revealed some $482 million in deferred-maintenance needs for the agencies supported by the Department of General Services alone. That price tag is a bit alarming, but Tom Johnson, an administrator within the Department of General Services, considers the knowledge a plus. “We have a better handle on what our problems are, a better defined list of deficiencies, a current price with it, and we think we have a pretty good way to prioritize.” One important new feature in capital management here is a the “project agreement” system. The Department of General Services writes an agreement for each project with its coordinating agency, detailing the nature of the project, scope, cost, schedule and agency responsibilities. In the past, the absence of such a system led to miscommunication and projects that exceeded approved cost and schedules. HUMAN RESOURCES: B+ There’s a great emphasis on innovation here. The central personnel office has put together good work-force planning data. Exit studies are helping managers figure out why employees leave government jobs. There have been significant reforms in hiring, with rigid testing standards eliminated and agencies given great flexibility to make their own decisions. This past year, hiring time was reduced from 51 days on average to 41 days, with a goal of 30. Still, there are some pesky obstacles to overcome: A majority of employees are capped out in their salary potential by narrow pay ranges. And the performance-appraisal system is viewed as time-consuming and inconsistently completed. The appraisals don’t seem to have much impact, but given their shaky quality, that might not be such a bad thing. MANAGING FOR RESULTS: A- Some years ago, Iowa was accused of setting targets that were too easy to achieve. It has changed that. “Our goals are so ambitious they’re scary,” says Mary Reavely, director of measures. She points to language declaring that all Iowa children must be covered by health insurance when they’re born. If the state accomplishes that, it will be the first one to do so. Where Iowa really shines at MFR is in collaboration: agencies working together, labor and management coming to terms, conversations between the private and public sector. This is evident not only in the state’s generally strong strategic planning but also in its choice of outcome measures. The Vilsack administration has made results measurement a priority. Department heads are held accountable for making data-based decisions on a regular basis. Areas for improvement include linking output measures with desired outcomes, driving goals and results down to the performance level of individual employees, and better validating the measures the state is generating. The state’s auditor is being brought in to help with that process. INFORMATION TECHNOLOGY: B Legislation enacted last year has enhanced the coherence of Iowa’s IT structure. For the first time, the CIO holds a statutory position, and has been given authority to require interoperability of new IT systems. It is now abundantly clear to all agencies that before they procure anything, they must go to the IT department, submit a description and make sure the purchase fits with the state’s standards. What’s more, the state is requiring post-implementation review of new projects to see if they actually deliver on their promised benefits. Iowa is also poised to adopt an entity-wide IT architecture. “It’s been out for comment, because we don’t want to kill anyone when we adopt it,” says Tom Shepherd, administrator of the Office of Innovations in the IT department. On the other hand, the state hasn’t yet adopted a long-term IT master plan, although it is in the process of forming a master plan especially for e-government. AVERAGE GRADE: B+ 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.