BOISE – Idaho has finally adopted a long-term financial plan, but it’s still recovering from an “ill-timed” package of tax cuts in 2001 that led to revenue shortfalls.
That combination, more than anything, is why the state was given a B-minus in a new national study of state governments released today.
“After years in which the state’s conservative budgeting kept it from any notable disasters,” said the study done by the Government Performance Project, “Idaho ran into a fiscal fence in 2001.”
The net result was a revenue shortfall of 14.5 percent in 2002, a cut in agency budgets and a sales tax increase.
But still, Idaho’s grade falls right on the national average. It’s the same as seven other states, including New York, Florida and Wisconsin.
The study claims to be the only comprehensive, independent analysis of how well each state government is managed. Funded by the Pew Charitable Trusts, it analyzed how Idaho manages its money, infrastructure, employees and information.
The study, which put together two years of surveys, interviews by journalists and state agency information, gave Idaho a B-plus on money issues, a B on managing people and a C-plus on infrastructure.
Under each of those categories, the study assigned strength levels to subcategories. Idaho’s greatest strength, for example, is employee retention, and its biggest weaknesses are maintenance and capital planning.
Mike Journee, press secretary for Gov. Dirk Kempthorne, said that like most surveys, the study is based on a subjective set of criteria.
“It provides some interesting and useful comparisons of how we might compare to other states,” Journee said. “Beyond that, we don’t put much weight into it.”
Utah, which was given an A-minus, the highest grade in the study along with Virginia, has its own state planning department, Journee said. “So based on these criteria, they are going to get a good grade,” he said.
The study said Idaho decided to adopt a long-term financial approach “in a bid to catch up with other states.”
When the state decided to look beyond a two-year revenue forecast, it represented a “sea change,” the report said.
It wasn’t a “controversial move in much of the country – just a boilerplate testimony to a long agreed-upon tenet of good public management,” the study added.
Despite the higher grade on money, the state’s revenue forecasts haven’t been very accurate, according to the study. The forecasts have ranged from a 16.7 percent overestimation in fiscal year 2002 to 13.6 percent underestimation in 2004.
Yet, Idaho “didn’t face as much of a fiscal crisis as other states did,” said Katherine Barrett, one of the project editors for the study, largely because the sales tax was temporarily raised from 5 percent to 6 percent.
Why was the state’s infrastructure a weak point in the study?
For one thing, maintenance of facilities, roads and bridges has been more than 50 percent underfunded since 2000, the study noted.
“To put off maintenance is a bad thing,” said Don Kettl, co-director of the study and research director of the University of Pennsylvania’s Fels Institute of Government. “It ends up costing the state in the long run or if things start falling apart.”
In order to combat a big piece of that problem, Kempthorne has proposed a $1.6 billion construction plan to improve roads across the state.
“The governor has addressed most of the issues in the survey,” Journee said.
The study also gave Idaho a C-plus in the information category, or how state officials use information and technology to communicate with the public, make important decisions and measure the effectiveness of services.
This is the third time the GPP study has been done, but comparisons can’t be made to previous years, Kettl said.
“The criteria have been redefined,” he said. “It would be inaccurate to compare grades from previous studies.”
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