The financial downturn of the last few years left states with ailing tax systems, neglected infrastructure and aging work forces, a new nationwide analysis concludes. It also says that many states struggle with basic flaws in their tax systems, bringing their governments too little money to pay for everything from roads to health care to schools.
The silver lining, according to the Government Performance Project released today, was that the fiscal crisis drove many states to become innovative and more efficient. The authors of the report, academics drawn from across the country and journalists at Governing magazine, hope that state leaders will share examples of good governance highlighted in the analysis.
The study, a project of the University of Richmond that was funded by The Pew Charitable Trusts, an independent, nonpartisan group, awarded letter grades to each state on how it handled finances, personnel, infrastructure and modern information systems through the downturn, plus an overall grade.
Nevada got a "B-minus," earning high marks for agency coordination and for its response to a budget shortage in 2003.
The survey gave kudos to Gov. Kenny Guinn for pushing for a tax increase that "did bolster Nevada's faltering revenue" and gave the state a more balanced source of revenue.
The state was docked for weak oversight and management of its contracts. Although a 2001 audit called Nevada's bidding process unfair, the survey found the state was slow to act on the audit recommendations.
Nevada also lost points for failing to act on a serious work force shortage. Nurses, mental health professionals, occupational therapists and information technology workers are in short supply. The ratio of social workers to clients in Nevada averages about 37-to-1, the report said. Researchers recommend a 17-1 ratio.
Despite recent cost-of-living increases, the state often pays its workers less than local and county governments, which makes recruitment difficult, the report said. The problem was compounded by a hiring process researchers called "one of the most restrictive in the land."
No state failed. Utah and Virginia scored the highest overall. Alabama and California scored the worst, each with a "C-minus".
The project leaders plan to speak to state leaders and other groups about their findings, which will be published in Governing magazine and online, and encourage discussion.
"We want these results to be in the hands of decision makers," said Susan Tompkins, project director. "We're going to travel to the states and talk to anybody that wants to talk to us."
The study tried hard not to generalize, and noted that each state's experience was unique, both in the problems faced and the solutions pursued, successfully or not.
"States are rising to the challenge of what they're facing," Kettl said. "Fifty different states are doing it in 50 different ways."
But several widespread problems emerged, especially "structural deficits" that left many states struggling to bring in enough taxes to provide the revenue that run government. The problem has been widely acknowledged by state leaders, who have complained that their tax systems are geared to a 1950s manufacturing economy, not a 21st century service- and technology-centered one.
The report concluded that the healthy 1990s masked the problem, and the spending increases and tax cuts of those years left states less able to overcome the downturn when it came.
Also, many states have neglected maintenance of their infrastructure, along with the training and recruitment needed to keep their work force strong, as they've tried to keep their budgets balanced, the authors found.
Oklahoma budgeted no money for facilities maintenance last year, and California shifted funds from maintenance to its government-wide general fund for the past two years, the report found.