The State of Our State

Jeff Alworth

In their biennial review of state governments two years ago, Governing Magazine was phlegmatic in its appraisal of Oregon's performance:

"Whatever one may think of Oregon’s tax system, the state does a good job of managing it. Customer service efforts are good and analysis is top notch....  But all the high-tech bells and whistles in the world won’t really address Oregon’s central problem. It has created a revenue structure that contracts pneumonia when the economy gets a bad cold. And no matter how many vitamins you take, everyone gets a cold every now and then."

Many states were suffering along with Oregon, as the recession cut deeply into local coffers.  But overall, though Oregon's problems were severe, Governing gave the state props: "fairness to taxpayers" and "management of the system" were rewarded with three-star ratings (out of four).   The magazine decided, apparently owing to the state's long history of sober and sane budgeting, to give Oregon the benefit of the doubt.

Not any more.  The new assessment is out, and this year, the magazine doesn't like what it sees: 

"'Mess' is the right word. Underlying the problems that have left the state facing shortfalls year after year — just to continue funding services at current levels — is a dysfunctional tax system."

The report looks at four areas: money, people, infrastructure, and information.  Highlights from the report include the following findings (distilled from larger reports):

Money (Grade: D)
Oregon's forecasting is problematic, given the state’s heavy dependence on income taxes and the influences of citizen referenda. Oregon has not passed its budget on time in the last decade. The state is forced to pass continuation budgets every cycle. The budgets do not distinguish between annual fiscal years and the state passes about 100 appropriation bills. Oregon’s tax structure is terribly imbalanced. A lack of diversification has left the state facing continuous multi-million dollar shortfalls.

People (Grade: B-)
The state’s antiquated and ineffective human resources information technology system inhibits central and agency human resource management processes. Although several pilot programs exist at the agency level, workforce planning is conducted informally throughout Oregon. The good news is that only two percent of Oregon’s classified workforce is eligible to retire in the next five years, the lowest in the nation... Oregon does spend an above average amount in employee benefits, paying for all of an employee’s health insurance and promoting telecommuting and wellness seminars. Despite a below average amount spent on training by the central and transportation agencies, promotions are above average in the state.

Infrastructure (Grade: B)
Funding for maintenance activities has diminished somewhat, but not as much as the state’s fiscal woes might suggest. Deferred maintenance of the state’s assets, including transportation, is between 10 and 25 percent under-funded. Yet the state does an excellent job at coordinating capital projects. In 1997, the legislature created the Capital Projects Advisory Board to review all major construction and acquisition projects and lease projects prior to any agency’s submission of such projects to the budget office.

Information (Grade: B)
The state has a comprehensive strategic plan and reports biennially on progress towards achieving the vision outlined in that strategic plan. Agencies are responsible for collecting data on program outcomes and discussing how these outcomes affect progress towards statewide goals. While performance information was included in the budget in prior years, Governor Ted Kulongoski has taken steps to use the budget as a strategic tool, guiding policy by creating priorities. The state’s performance auditing function could be strengthened to provide greater oversight of agency performance.

This isn't particularly shocking news to anyone vaguely following Oregon's funding battles over the past couple years.  What it does reflect is the steady worsening of the state's problems and--more critically--the concomitant erosion of faith in the state's ability to put its house in order.  Governing Magazine gave us a pass two years ago.  They're unwilling to do so this time around.  The coda to the report is actually Governing's introduction, a warning of what this kind of mismanagment begets:

"There are some remedies worse than the disease," a playwright wrote more than two millennia ago. Publilius Syrus could have been referring to the current state of the 50 states. In order to weather an economic bashing that was not of their own creation, many states have cut back on their analytic capacity; allowed their roads, bridges and buildings to decay at an accelerating clip; resorted to financial tactics that only defer fiscal pain; slowed down or rejected positive initiatives in human resources and — in a few extreme cases — have so undernourished government that they risk malnutrition or worse.

While leaders in a growing number of states appear to believe they’re serving the public good by squeezing government dry, there’s little question that minimizing management carries a host of dangers that directly affect the lives of citizens. Unsafe, poorly maintained roads cause deadly accidents; mismanaged workers’ comp programs harm the health of corporations and workers.

By Jeff Alworth Feb. 04, 2005