Grading the States introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: Nevada GOVERNOR Kenny Guinn (Republican, elected 1998) LEGISLATURE House — 27 Democrats, 15 Republicans Senate — 12 Republicans, 9 Democrats FINANCIAL MANAGEMENT: B- This is a state whose economy is about as predictable as red coming up on the roulette table. Nevada protects itself from shortfalls with an ample rainy day fund, and for the moment, careful budgeting has kept the balance between revenues and expenditures in tandem. But it’s a budget that’s been built up by unsustainable growth rates. “I think long term we’re headed for problems,” says Perry Comeaux, director of the Department of Administration. “I guess if you look in the dictionary under structural deficit the state seal of Nevada ought to be right there by the definition.” Another issue for this fast-growing state has been a penchant for beginning new programs and passing laws without fully projecting their costs into the out years. For example, a 10-year-old law requires the state to move to small class sizes. Nobody argues that this is a bad idea. But it cost $87 million in the current fiscal year and will run about $188 million more in the coming biennium. Not surprisingly, both the legislature and governor are interested in coming up with a more careful approach to long-range proposals. Two areas in which Nevada is doing particularly well are cost accounting and purchasing. The state has increased its pool of vendors through online registration and is leveraging its buying power through alliances with other states. CAPITAL MANAGEMENT: B The 600,000 new residents who arrived in Nevada over the past decade have strained efforts to build new roadways, maintain those in place and decrease the backlog of deferred maintenance. It’s a constant push and pull, but the Department of Transportation is trying hard to strike a reasonable balance. “The priority is always preserving the existing systems,” says Leif Anderson, of the DOT Program Development Office. The department estimates its repair backlog is about $670 million. The state has done a good job monitoring and evaluating its facilities projects. Once construction begins, the State Public Works Board issues monthly reports to the involved agencies and the legislature. The building boom in Las Vegas is pretty sexy work, so while most of the country is hurting from a tight construction market, contractors are coming here from Utah, Montana and California to compete for jobs. That’s helped keep the state’s building expenses competitive and keep work schedules on track. Meanwhile, the list of repairs and renovations needed for state buildings is growing, mostly due to changes in agency priorities. HUMAN RESOURCES: D+ Nevada’s job-classification system worked well 25 years ago, when the work force was about 3,000. Now, there are 17,000 employees and the process needs rehabilitation, but a recent reform proposal was axed because of revenue shortfalls. A lack of funding also has stymied the state’s ability to take advantage of technological innovations for hiring. The state’s merit system rules and regulations slow things down, as does the need to get budget approval to fill positions. Pay flexibility is also limited, which makes it difficult to recruit in areas of high demand. Almost half of the work force has capped out in its salary range; but the state still lags about 25 percent behind market levels for private employment. It doesn’t even compete effectively with pay levels in the state’s local governments. Fortunately, Nevada has recognized the need to do more work-force planning and has begun a few pilot efforts. A new human resource management information system has been implemented and a data warehouse will also vastly improve access to information, which has been one of the big problems with work-force planning here. MANAGING FOR RESULTS: C Seven years ago, Nevada’s agencies wrote strategic plans tied to a set of statewide goals. Most agencies, although not all, revised their plans in 1996 and 1998. They took a hiatus in 2000, while the new governor conducted a fundamental review; now a new set of long-term policy initiatives is expected during the 2001 legislative session. For most agencies, full-scale strategic planning will probably resume in the next non-legislative year, 2002. Although top leaders here see value in the planning process, there appears to be some concern at agency level that it’s just the management “flavor of the month.” One official complains that if strategic planning is “done halfheartedly, put on a shelf and ignored, [it] pulls state employees’ valuable and limited time away from providing services to Nevada’s taxpayers.” Nevada has a good listing and organization of performance measures in its budget, with cross-year comparisons for each program under each agency. The majority reflect only outputs, though, and measures are not linked to higher-level goals. The state has done little with citizen-satisfaction measures. INFORMATION TECHNOLOGY: C- Nevada has a large collection of sub-entities that run their own IT shops independent of the rest of the state. Standardization is a major probolem, notably in programming languages and databases. The state’s programming group currently supports 17 languages, with the result being fragmentation, excess capacity and reduced economies of scale. Efforts to bring in new entity-wide systems, much ballyhooed a couple of years ago, have been delayed, although some are in place and others are moving along. On the positive side, Nevada has finally developed a statewide IT plan. At press time, it was just awaiting the governor’s blessing. The state is behind the curve on delivering transactions over the Internet but seems committed to moving forward on that front. 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.