The financial downturn of the past 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.
But Utah was one of the exceptions, tying Virginia with an "A-minus" for the highest state grades overall in the Government Performance Project being released today. The report praised the Beehive State's work to keep its infrastructure — roads, bridges and government buildings — well-maintained.
The silver lining for other states was that the fiscal crisis drove many 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.
"There isn't any state that can't learn from the others," said Don Kettl, a political science professor at the University of Pennsylvania and the project's academic coordinator. "No state really has everything under control. And different states have different lessons to teach."
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.
No state failed, but Alabama and California scored the worst, each with a "C-minus."
The report sought to accentuate the positive, and particularly praised:
Virginia's management of finances, which includes six-year plans. State leaders also have sought to modernize the state's tax system.
Georgia's handling of personnel. The state considers its work force needs along with operating strategy.
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 — whether successful 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.
But broadening existing tax structures has proven difficult politically.
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.
In more than half the states, one in five employees will retire in the next five years, with Tennessee expected to see 40 percent of its work force leave and Maine and Nebraska close to it. Efforts to resolve the problem are exacerbated by the push for smaller government.
Kettl said the report wasn't taking a stance about bigger government or smaller government. "What we're saying," he said, "is the government you have ought to work."