- The Washington Times - Sunday, January 30, 2005

RICHMOND — Virginia is at the top of the class nationally in a just-finished survey of the nation’s best-managed states by the Government Performance Project.

Virginia and Utah were the only states to score overall A grades in the GPP’s “Grading the States 2005” report, a comprehensive, independent assessment of how well each state is managed. Both states got A-minus cumulative grades.

But Virginia was the only state to score A’s in all four categories, the average of which determines the overall grade.

The GPP is an initiative of the University of Richmond and is funded by the Pew Charitable Trusts, a nonprofit and nonpartisan public-issues research organization based in Philadelphia.

Maryland earned a B and was praised in the report as a “national leader” in managing projects to improve the state’s infrastructure.

This year’s report marks the third time the GPP has graded the states, and the results are being published in the February issue of Governing magazine.

A team of academics and journalists who spent more than a year doing research for the project singled out Virginia’s money management, Georgia’s human-resources policies, and Utah’s infrastructure maintenance for particular praise.

The report cited as a national example the state’s 2002 law requiring six-year budget forecasts, describing it as a saving grace for a state in which governors serve for only four years.

“Outsiders might wonder how the only state that bars its governor from seeking re-election could provide its administrations with sufficient clout to make difficult decisions. But consistently it does,” the study’s summary of Virginia says. “Virginia has an ethos of good management that has genuinely been institutionalized.”

Virginia has received high marks for its management before. In 1992 and 1993, Financial World magazine ranked Virginia as the nation’s best-managed state.

This year’s report criticized the 1998 car-tax cut and its architect, former Gov. James S. Gilmore III, a Republican. It blamed the incremental, five-year rollback of the locally assessed tax on personal automobiles for “opening a $1 billion budget shortfall” and called it “politically popular but fiscally unsound.”

The car-tax cut, still only 70 percent complete, obligates the state to repay cities and counties for their lost tax collections.

Virginia got an A grade in the money-management category and A-minus grades in the three other management categories: people, infrastructure and information.

“Historically, one of Virginia’s few management trouble spots has been its Department of Transportation,” the report said. It noted that fewer than 20 percent of VDOT’s projects were completed on schedule four years ago compared with the present, with two-thirds of the projects due to finish on time and 90 percent within budget.

The lowest overall grades nationally went to Alabama and California, each of which scored a C-minus.

Among the four categories, Maryland scored best in “infrastructure” — an A-minus — and was praised as doing a “good job of thinking ahead” and being a national leader in using “strategic planning techniques for its infrastructure.”

The report mentioned Maryland’s unified five-year plan, in which “a thorough system of project-monitoring helps the state keep its construction initiatives on time and within budget.” By emphasizing quality control before starting projects, Maryland also was lauded for keeping costly change orders down in recent years.

But Maryland was scolded because funding for maintenance was “lagging behind in most areas.” The state has an operating maintenance backlog of $37 million, and a capital maintenance backlog of $68 million. “Over the last five years, appropriations have not kept pace with need,” the report said.

Maryland scored a B in the money category, in part because of its use of consensus forecasting to estimate revenues, a close-to-fully-funded state pension fund, a strong credit rating, and an ability to maintain “a healthy balance in its budget-stabilization fund even during periods of budget shortfall.”

In the “people” category, the state got a B-minus, with praise for streamlining the hiring of workers in areas with shortages. For instance, managers are allowed to hire nurses on the spot, with background checks performed later, the report said.

But Maryland came up short in several areas, earning a C-plus in the information category.

Maryland was one of the first states in the country to set up a “performance-based budgeting” program in 1997, and “was primed for a new process of integrating performance information with the budget process and linking data with budget decisions. But the promise,” the report says, “was never fulfilled.”

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