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From Governing’s Delaware
Delaware is almost compulsively careful about its financial management. Pensions are fully funded. The budget is always on time. Structural balance is not in question. And the state is one of only seven with AAA ratings from all three bond rating agencies. At risk of sounding like a pure-bred Freudian, the roots of this compulsion seem to trace back to a nearly three-decade-old trauma. 
In 1977, the state was trying to recover from two previous administrations that had brought it to the brink of fiscal disaster. When Governor Pete du Pont found resistance to efforts at change, he decided to throw a serious scare into the legislature, the rating agencies and the citizenry by telling everyone that as far as he was concerned, Delaware was virtually bankrupt. Not too surprisingly, the strategy worked. What’s more, virtually every long-serving state official remembers it. A startling number of them act like it happened last Tuesday. “It helps a lot that the state went through what it went through 30 years ago,” says Treasurer Jack Markell. “We still have some who lived through that.” Foremost among them is the current governor, Ruth Ann Minner, who was in the legislature at the time.
The reforms that followed the 1977 crisis have nearly all remained in place. Among them are a strict set of spending and taxing controls and a revenue-estimating group — the Delaware Economic and Financial Advisory Council — that updates its estimates six times a year. That’s a lot more revision than takes place in most states. In 2003, when the state encountered a rare downturn in revenues, the advisory council picked up on the problem before the end of the first fiscal quarter. “We froze hiring and made cuts,” says Markell, “but we never had the kind of cash-flow problems that would have necessitated borrowing” for operational costs. If anyone in Delaware state government does consider diverging from fiscal standards, they’ve got one of the most powerful budget agencies in the country to deal with. As one senior legislative staffer puts it, “the executive branch agencies are told, pretty much, what to do by the budget office. The budget director is the governor in proxy. The legislative branch is fiscally nonexistent as far as expenditure [estimates] are concerned.” That concentration of power may not be the kind of thing that wins plaudits from the folks who write seventh-grade civics books. But it certainly seems to work for Delaware. The goal of the system is to make sure that debates center around policy, not numbers. Most programs are held accountable to clear measurements of performance. Not long ago, for example, the state found that it took three days to get results from tests to see if a driver was intoxicated. Costs to the court system — and the potential of leaving drunk drivers behind the wheel — outweighed the cost of adding two positions to decrease the turnaround time to seven hours. Money was found to speed up the process. Delaware has found a way to take politics out of its decisions about road maintenance. A weighted score, based on rigorous condition assessments, is developed for the state’s whole network of roads. The score doesn’t just include pavement quality but also average daily traffic and other key pieces of data — for example, whether a road is near a school. Explains Nathan Hayward, secretary of transportation: “You grind it up through the sausage factory and each spring we come up with an inventory of roads that need to be resurfaced.” Unfortunately, the state is better at cataloging its repair needs than paying to meet them: The road maintenance backlog averages about 25 percent a year. Another area where the state has lagged is in its use of clear data for workforce planning. Historically, Delaware has not had any formalized statewide workforce plan. The success of current efforts to get this work going at the agency level will be critical as state government begins to hire again. Moreover, such planning also will help prepare for any future freezes.
Copyright © 2005, Congressional Quarterly, Inc. Reproduction in any form without the written permission of the publisher is prohibited. Governing, City & State and Governing.com are registered trademarks of Congressional Quarterly, Inc. |
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