Grading the States introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: South Dakota GOVERNOR William J. Janklow (Republican, elected 1994; also served 1979-87) LEGISLATURE House — 50 Republicans, 20 Democrats Senate — 24 Republicans, 11 Democrats FINANCIAL MANAGEMENT: B- South Dakota has survived reasonably well for years with relatively few formal management practices in the financial field: There are no public long-term revenue or expenditure projections, for example, and there is little central control of contracting, which is handled by individual agencies. Financial reporting is generally weak. Still, the budget has been in solid balance, and a budget-reserve fund and property-tax-reduction fund have both been infused with new resources from recent surpluses. There may be pressure to change some of the looser methods in the period ahead as budgets tighten in a state with a narrow revenue base and few easy options for raising more money. Large property-tax cuts have gone into effect in recent years, and the broadened sales tax that was supposed to make up the difference didn’t do so. Last November, voters put an end to the inheritance tax. That isn’t a huge source of cash, but it’s one more that will have to be made up somehow. CAPITAL MANAGEMENT: B- South Dakota is in the unique position this year of appropriating no new funds for facilities construction. Not a single project was even requested. The tiny capital budget thus consists of about $2.5 million in general fund dollars for maintenance and repair, and $4.5 million in supplemental funding for a small number of existing projects. When the state actually builds something, it does a pretty good job. It tracks projects primarily at the central level, with the State Engineer’s Office assigning an engineer to each project. Monthly status reports are provided to the involved agencies and to the governor. Almost all projects finish on schedule and on budget, and the state uses a variety of alternative project-delivery methods to keep that record up. The Department of Transportation’s record is similar. Most projects finish on time, but construction tends to average about 2 or 3 percent more than anticipated. The department is faced with a construction backlog of about $570 million. HUMAN RESOURCES: B- The human resources structure is centralized in this state, with HR managers in the individual agencies treated as employees of the central Bureau of Personnel. Weekly staff meetings keep everyone in close contact. The state also maintains a personnel management advisory board, designed to get input from employees and provide recommendations to the governor’s office. Some of the members are appointed by the governor and some elected by state employees. There is no formal work-force planning, and typical of South Dakota’s attitude toward much in the way of formal managerial practices, leaders maintain that it’s not necessary. They say that the state’s small size makes a much more informal approach workable. Meanwhile, until the state gets a new human resources IT system, it wouldn’t really have the information to do work-force planning, even if it wanted to. The Bureau of Personnel has moved away from setting minimum hiring qualifications and choosing the candidates agencies can interview. Now, for the most part, agencies interview whomever they want to, looking for the “knowledge, skills, abilities and competencies” that they’ve defined for each position. Hiring decisions can sometimes be made on the spot, contingent on completion of a background check. MANAGING FOR RESULTS: D South Dakota is the only state that says it has no formal managing-for-results system of any kind. Nor does it have a statewide strategic plan. The legislature did pass a performance budgeting statute in 1994, but it was ignored every year after that until 1999, when it was simply repealed. “There was a collective decision between the governor and the majority of the legislators that we had a statute on the books and it wasn’t the governor’s intent or the legislature’s to pursue the process,” says Curt Everson, commissioner of the Bureau of Finance and Management. The state government does use citizen task forces and advisory groups to inform the executive branch of citizens’ priorities. A few agencies, notably the Highway Safety Department and Department of Transportation, have solid plans with strategies and performance measures; most others simply collect output data, in part for the purpose of documenting increases in workload that might justify a decision in favor of increased appropriations. INFORMATION TECHNOLOGY: B The CIO is a virtual information czar in this state. Nothing of significance in the executive branch is done outside the bailiwick of his office. “It’s a mighty powerful position to be in,” admits Otto Doll, the current CIO. “I’m one of five entities in South Dakota state government that looks across the entire government.” This system helps in keeping the state’s IT procurements standardized, and encourages sharing of information between agencies. The statewide IT plan isn’t terribly detailed, but that was part of a conscious choice to keep it under 10 pages — an effort to ensure that people actually used it. South Dakota is one of the very few states that can tell you exactly how many of its transactions can potentially be put online: 1,225, according to Doll. Right now, about 100 of them can actually be completed online; most of the others at least offer forms that can be downloaded. The more complicated transactions remain to be converted. Among the departmental IT systems, the one used for human resources is the big trouble spot, but it’s scheduled for replacement in about six months. The state also badly needs a genuinely centralized capital management information system. 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.