South Dakota

With 66 counties and a tiny population, South Dakota has an unusual amount of government per capita. “We’re probably the most governed state in the nation,” says one legislator, who estimates that there’s an elected official for every 400 citizens. “There’s an awful lot of governing going on.”

But tracking the effectiveness of all that government is a different story. South Dakota has no real way of knowing how well its public entities are performing, either at the state or local level. Agencies do not gather performance data in any formal or consistent manner. With a couple of exceptions, the goals that agencies do set tend to be very broad, with no targets or specific strategies to achieve them. There’s no evidence that the state is utilizing any outcome-based performance measures in the budget process. Nor is there any system of performance auditing.

In short, performance management barely exists in South Dakota. The state made a half-hearted attempt a decade ago to gather some relevant information, but that effort has been abandoned, according to Auditor General Martin Guindon. The statutes were put on the books in 1994, but the legislature repealed the laws in 1999 at the governor’s recommendation. “The ball’s just never really been picked up again,” he says.

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 B Capital Planning Project Monitoring Maintenance Internal Coordination Intergovernmental Coordination Information D Strategic Direction Budgeting for Performance Managing for Performance Program Evaluation Electronic Government • Population (rank): 754,844 (46) • Average per capita income (rank):    $29,234 (31) • Total state spending (rank):    $2,771,705,000 (50) • Spending per capita (rank):    $3,647 (43) • Governor: Mike Rounds (R) • First elected: 11/2002 • Senate: 35 members: 10 D, 25 R • Term Limits: 8 years (consecutive) • House: 70 members: 19 D, 51 R • Term Limits: 8 years (consecutive)

That’s the bad news about South Dakota management. The good news is that even without the formal measurement or information tools that most states now routinely possess, it does rather well at handling most of its nuts-and-bolts management tasks.

The Transportation Department, for example, has a wide-ranging multi-modal agenda and a commendable focus on public involvement. Maintenance is not a serious problem: There is a long-term approach to keeping up physical assets. “Life-cycle costs are an important part of our decision-making process,” says Ben Orsbon, planning and programs manager for the state’s DOT. “We spend our resources first to preserve what we have.”

The state does a similarly capable job of managing personnel. South Dakota has the most centralized personnel services in the country. A decade ago, all human resource functions were moved from the agency level into a single Bureau of Personnel, which now handles workforce planning for all the agencies. In the past few years, BOP has adapted the state’s hiring practices to cope with the upcoming wave of retirements and take care of hard-to-fill positions, especially in geographically remote areas. Agencies are allowed to begin interviewing applicants before the application deadline has even closed. Managers have the flexibility to negotiate salaries that will attract applicants to more rural areas.

When it comes to finance, the story is rather positive as well. With a healthy budget reserve, sound cash management and a remarkably active risk management office, the state can claim a well-balanced financial structure. While South Dakota has no personal income tax, its sales tax is extremely broad and covers most services. In 2004, citizens affirmed the broad nature of the tax, voting to keep the state’s sales tax on food.

For the time being, then, much seems to be working well in South Dakota. But without any ways to measure performance or assess how well agencies are running themselves, it’s dependent on the instincts of individual managers, not the soundness of institutionalized and replicable processes. It knows that it’s doing many things well, but it can’t tell you exactly why.

Governor Mike Rounds seems to be aware that there’s a problem. In 2003, he launched the “2010 Initiative,” which is supposed to set priorities for economic development, quality of life and tourism. The plan is to be updated annually, and some agencies are using it to shape their own goals. “2010 is a model we’re trying to use as a way to measure specific results,” says Rounds. “That’s the direction I want to go. I want measurable, tangible results with the money we spend in South Dakota.” It’s a start, but it covers only a small portion of state government, and its utility has yet to be demonstrated even there.

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

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