Massachusetts

A quick look at the capital planning process in Massachusetts might easily lead to the notion that the state is setting priorities in textbook fashion. The governor and legislature are jointly responsible for approving annual bond bills that authorize about $10 billion in projects.

Formally, it has all the characteristics of a properly collaborative process.

Informally, it turns out to be nothing of the sort. The truth is that the governor has control over what gets spent, selecting some $1.25 billion in projects lucky enough to get his personal stamp of approval. As a vehicle for good decision making, this is an Edsel. “There’s no public prioritization and even the administration’s prioritization is a mystery,” says Michael Widmer, president of the Massachusetts Taxpayers Foundation. “The process lends itself to secrecy.”

On the positive front in this field, the Massachusetts legislature did pass a capital construction reform bill last year, increasing both flexibility and oversight for contracting. This was particularly critical because the Bay State had embarrassed itself with its handling of the fiscally mismanaged “Big Dig,” the Boston highway project that ran up the largest capital cost overrun in U.S. history. The Big Dig was originally supposed to cost slightly more than $2 billion and ended up with a price tag closer to $15 billion. Even when the project was largely finished and seemed to have survived its troubles, it began developing new ones. In the past few months, a series of leaks in its Interstate 93 tunnel have been making news.

Money C+ Long-Term Outlook Budget Process Structural Balance Contracting/Purchasing Financial Controls/Reporting People C+ Strategic Workforce Planning Hiring Retaining Employees Training and Development Managing Employee Performance Infrastructure C- Capital Planning Project Monitoring Maintenance Internal Coordination Intergovernmental Coordination Information C+ Strategic Direction Budgeting for Performance Managing for Performance Program Evaluation Electronic Government • Population (rank): 6,349,097 (13) • Average per capita income (rank):    $39,815 (3) • Total state spending (rank):    $32,847,974,000 (11) • Spending per capita (rank):    $5,115 (14) • Governor: Mitt Romney (R) • First elected: 11/2002 • Senate: 40 members: 34 D, 6 R • Term Limits: None • House: 160 members: 139 D, 20 R, 1 I • Term Limits: None

Last year, the legislature also decided to reform the school construction process, shifting oversight in this area away from the Department of Education to a new school building authority that will be supervised by a board chaired by the state treasurer. This was a sensible move. Also in 2004, State Auditor Joseph DeNucci found that Massachusetts had overpaid as much as $20 million for school construction projects because of poor oversight.

For all the headaches connected with the Big Dig, and the problems with capital planning in general, there’s reason to believe that Massachusetts has finally learned something about how to handle the gigantic public projects it has long had a taste for. The new convention center in Boston opened on time last summer. The neglect of routine infrastructure maintenance that appears to have been caused by a siphoning off of funds to the Big Dig now seems to have been corrected.

Although Massachusetts is facing a fiscal shortfall of about $900 million for the coming year, it has generally avoided a lot of gimmickry in its budgeting practices. It had a sizable reserve fund several years ago at the beginning of the economic downturn, made good use of it and has shown responsible attention to its replenishment. Last year, the legislature took the first step toward approval of a constitutional amendment that would allot 1 percent of the state’s annual revenues to rainy day reserves.

Planning for the fiscal future could be a lot better, however. There are no public multi-year projections of revenues and expenditures in Massachusetts, and the measurement of long-term program results often is subsumed by attention to the latest crisis. “There’s a focus on today, on this year,” says Widmer. “Long-term thinking would cut very much against the grain here.”

One other serious issue facing the state involves the size and condition of its workforce. Personnel policy is very much in transition, with a major reorganization underway that is cutting the number of employees and whittling down the number of agency personnel offices. Some of this restructuring appears to be working well, and the central personnel office receives praise from agencies for its responsiveness. But individual employees are under strain as the workload has increased; grievances are high and the topic of low employee morale comes up frequently.

For additional data and analysis, go to: http://results.gpponline.org/massachusetts

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