Maryland

Maryland was among the first states in the country to commit itself to performance-based budgeting. Under a comprehensive “Managing for Results” initiative, started in 1997, the state was primed for a new process of integrating performance information with the budget process and linking data with budget decisions. But the promise was never fulfilled.

Today, seven years after enactment of the landmark law, budget decisions are not tied to performance data. An audit in 2003 found that only 2 percent of the state’s agencies were even submitting performance information to budget writers in a timely way. In 2004, that figure rose to 7 percent; hardly enough to make much of a difference.

It’s not that the agencies haven’t been generating information. If anything, they may have been generating too much to be used in an effective way. “It got to the point of being ludicrous,” says David Juppe, of the legislature’s Office of Policy Analysis. “They were reporting an overwhelming amount of data — they stopped counting at 8,000 measures. It was really growing out of control.”

Money B Long-Term Outlook Budget Process Structural Balance Contracting/Purchasing Financial Controls/Reporting People B- Strategic Workforce Planning Hiring Retaining Employees Training and Development Managing Employee Performance Infrastructure A- 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): 5,296,486 (19) • Average per capita income (rank):    $37,331 (4) • Total state spending (rank):    $23,317,261,000 (17) • Spending per capita (rank):    $4,278 (29) • Governor: Robert L. Ehrlich Jr. (R) • First elected: 11/2002 • Senate: 47 members: 33 D, 14 R • Term Limits: None • House: 141 members: 98 D, 43 R • Term Limits: None

The rabbit-like propagation of information is now being reined in. Agencies have made a conscious effort in the past couple of years to streamline their performance reporting to make it more usable to legislators and others who may need it. Last year, the state produced a 60-page strategic budgeting guide to help agencies understand how to tailor their performance measures to the actual tracking of results. Agency managers are now being asked to rank all of their programs as high, medium or low priority.

But even if the agencies begin producing appropriate performance measures — and reporting the information on time — Maryland will still have trouble linking them explicitly to the budget. “Our budget bill is a program-type budget,” says Juppe. “The performance information that gets reported doesn’t always correspond to programs and line items, so it’s hard to draw a relationship between performance and budgeting.”

Maryland isn’t particularly strong at centralized strategic planning, either. Agencies do set targets for future performance — a powerful tool — but the goals tend to be short-term in nature. The good news is that last year lawmakers passed legislation requiring the governor’s budget to include an overarching strategic report, limited to 70-some measures, that lays out statewide goals and lists performance goals across agency lines. That should be a particularly valuable document in a state where the governor maintains more constitutional power than in most places.

The absence of effective planning has had a negative impact on some major areas of state management. There is no statewide workforce plan; agencies submitted a review of workforce needs for the first time in their fiscal 2006 budget plans. “We’ll have a much better handle on what our human resources needs are for the next couple years,” says Andrea Fulton, executive director of the Office of Personnel Services and Benefits. Meanwhile, however, budget austerity has slowed centralized employee development and leadership training programs.

In other fields, Maryland does do a good job of thinking ahead. It’s a national leader, for example, in its use of strategic planning techniques for its infrastructure. A unified five-year capital plan contains a careful listing of projects by agency and function. Projects are prioritized, and the list is updated each year in the process of preparing the capital budget request presented to the General Assembly. A thorough system of project-monitoring helps the state keep its construction initiatives on time and within budget. Because there is a prudent emphasis on quality control before projects begin, costly change orders have decreased in recent years. Capital spending hasn’t kept up with what’s needed, but Maryland has a good handle on its requirements and is closer to meeting them than most states.

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

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