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| C+ | Alabama |
• Population (rank): 4,599,030 (23)
• Average per capita income (rank): $21,270 (40)
• Total state spending (rank): $22,260,824,000 (24)
• Spending per capita (rank): $4,840 (31)
• Governor: Bob Riley (R)
• First elected: 11/2002
• Senate: 35 members: 23 D, 12 R
• Term limits: None
• House: 105 members: 62 D, 43 R
• Term limits: None
Three decades ago, Alabama was far ahead of most states in its plans to use performance measures to improve the functions of government. Its Budget Management Act, passed in 1974, required all state agencies to write strategic plans and program objectives, and to report on them quarterly. In the years that followed, the state had more pilots than a small airline, and churned out a great deal of paper. But it was all a lot of sound and fury, signifying very little. In the words of Anne Elizabeth McGowin, the state's assistant finance director, "in some cases, the reports were as worthless as paper clips. Nobody cared what they were counting "
In 2008, Alabama is geared up to finally fulfill its long-lost promise. Four years into Governor Bob Riley's SMART Governing program (Specific, Measurable, Accountable, Responsive, Transparent), agencies are producing usable strategic plans and quarterly reports. SMART has given Finance Director James Allen Main more information than ever with which to prioritize budget requests. That's true, too, on the capital side, where agencies' requests now must include project justification and estimated operating and maintenance costs, and are compiled for decision makers in a statewide capital plan.
Is Alabama a national leader now? Not by a long shot. For one thing, the use of these performance measures is somewhat limited to the budget season. Although quarterly reports are generated, measures aren't often relied upon as a management tool for the rest of the year. The legislature generally hasn't bought in yet. So the state is still at a very early stage in many of these enterprises. But the progress over the past few years is significant.
Of course, even if SMART continues on an upward trajectory, it isn't a panacea for the state's more fundamental problems. Alabama is still plagued by an overly earmarked fiscal process, which has allowed the education budget, fueled by swiftly growing income tax revenues, to rise 60 percent in the past four years, while the general fund budget — responsible for almost everything else in the state — has trailed. There's a $400 million hole in the 2008 education budget, and another gap looms for 2009.
Roads, bridges and buildings also are desperately underfunded. The state's Department of Corrections resorted to selling off $20 million worth of land last year to pay for keeping its prisons from deteriorating further. On the transportation side, the state has racked up $3 billion in deferred maintenance, and a package of bills designed to reform funding and management of the Department of Transportation died last year in the gridlocked Senate after passing through the House.
The Department of Transportation does have some reasons to be optimistic. It is now out from under a 13-year federal court decree over the department's hiring practices that cost more than $250 million and led to a statewide revision of testing and hiring standards. Morale is on the way up: Once again, employees are being hired and promoted, and the millions that were being spent in court should go instead to repaving roads and shoring up bridges.
While individual agencies' procurement may be improving, it can be very difficult to know what's happening on a statewide level. That's because the central office has no control over service contracts. State Purchasing Director Isaac Kervin can't say how much the state spends on services altogether, because none of those contracts cross his desk.
When it comes to purchasing goods, as opposed to services, Alabama has the opposite problem: The agencies have too little control, and the state's antique procurement laws can significantly slow down purchases. One straightforward solution: Give the agencies more authority to make necessary purchases — and then use the SMART system to hold them accountable.
For additional data and analysis, go to pewcenteronthestates.org/gpp.