“Money”: Counting New Jersey At Both Ends

BY: THE HALL INSTITUTE OF PUBLIC POLICY

The product of Governing Magazine’s Government Performance Project (GPP) “Grading the States” reports that New Jersey, in terms of management, is average. Not so bad considering the GPP reports that the national average is a B-, otherwise known as just above average. Both New York and Pennsylvania, often thought to be significant players in New Jersey’s fiscal history, meet this B- mark which significantly magnifies average New Jersey’s short comings. The Courier Post points to the fact that only two states, New Hampshire (D+) and Rhode Island (C-), scored lower than Jersey’s strong C. Indeed, as the scoring frame is shifted, the scale here is misleading, though, as New Jersey barely passes with a C, 3rd from the bottom, GPP researchers consider it to be the dregs when it comes to management.

Many of us have heard New Jersey described by Benjamin Franklin as a keg tapped at both ends or as a valley stuck between two mountains of conceit. Franklin accounted for New Jersey’s lack of culture in this way, geographically. However, are the GPP’s findings conducive to this kind of analysis? Are we poorly managed because of some geographic disadvantage?

The report begins with Money, a category in which New Jersey earns a C- and possibly the most discussed category in New Jersey media. For these reasons, it should be the focus of what follows.

Beneath “Money”, there are subcategories such as “Long-Term Outlook”, “Budget Process”, “Structural Balance”, “Contracting/Purchasing”, and “Financial Controls/Reporting”. GPP details their criteria for “Money” in the introduction:

Money
• The state uses a long-term perspective to make budget decisions.
• The state’s budget process is transparent, easy to follow and inclusive.
• The state’s financial management activities support structural balance
between ongoing revenues and expenditures.
• The state’s procurement activities are conducted efficiently and supported
with effective internal controls.
• The state systematically assesses the effectiveness of its financial operations
and management.

To begin, it is nearly self-evident that New Jersey is not so committed to the long term, neither do we care much for transparency or balance given the recent discovery of a truck sized short fall in this year’s budget. There is hardly anything in New Jersey that is more mysterious to the public than how the state procures and funds and given the sheer enormity of the lay-offs proposed recently by Corzine, it has obviously been a long time since anyone has considered which parts of the system produce more cost than benefit.

According to GPP, and on a three tiered scale of weak to strong, we are weak in all but two subcategories: “Budget Process” and “Financial Controls/Reporting”. In the latter two, New Jersey scores at mid-level. The opening of the GPP’s report explains that the researchers were enamored with New Jersey’s publishing budget changes to the budget as part of the supplemental budget process in which “the name of the lawmaker who made the change” in now provided. GPP maintains that this innovation has been responsible for expedient budget management since and we might see this as having contributed significantly to our mid-level “Budget Process” and “Controls/Reporting” scores. Yet, the contribution is not significant enough and when it comes to New Jersey’s overall “Money” score, it is nationally known that New Jersey can’t make the grade.

Other categories like, “Long Term Outlook”, “Structural Balance”, and “Contracting/Purchasing”, show New Jersey to be failing miserably as, in all three, GPP has rated us “weak”. Historically, as New Jerseyans have learned all at once this year, the significant lack of long term planning has landed the state in severe financial trouble—so much, in fact, that it’s really starting to sink in with some people. GPP evidences this fact noting that, in November of 2007, with a “$3 billion hole in a $33 billion budget” looming, “voters rejected a plan to dedicate the remaining half-penny of the sales tax increase to property tax relief—and they did this despite the fact that New Jersey has the highest property tax in the nation.”

While large scale restructuring, lay-offs, and toll/gas schemes lurk off in the immediate future, it is obvious that New Jersey’s prior management strategies lack foresight most of all. Further, to discover the present day traces of New Jersey’s historical lack of foresight we need look no further than this year’s state of the state address or any headline about state government in any New Jersey newspaper. The Hall Institute’s Executive Director, Michael P. Riccards, has described this historical lack of foresight as “there ought to be a law” mentality.

For quite a while, whenever some New Jerseyan felt the slightest bit of agitation, that New Jerseyan might chant what was to become more a maxim than a grumble, “there ought to be a law.” The words were heard and soon the legislation machine would be hard at the work of churning out new legislation and perhaps a new branch of government, staffed to the hilt, to house it in. Those days are over, when someone says “there ought to be a law” there ought to be a response, perhaps from a home owner: “And whose gonna pay for it, you?” Indeed, this change in New Jersey spending habits may produce a new kind of government in New Jersey, and perhaps, a new kind of New Jerseyan.

As well as the change in local dialect, there will also be a change in the way we negotiate our position “between two mountains of conceit.” This saving policy may mark the end of space race policy making by New Jersey state governors looking to put themselves and recognition-hungry New Jerseyans on the map. A middle child, it’s only natural that New Jersey policy makers and often voters join forces towards a common purpose to be the first on the moon by erecting un-staffed stem cell research centers, battleships in Camden of all places, and aquariums. These are feeble but costly attempts to ornament the geography of New Jersey, the curriculum vitae of its governors, and perhaps to more than stop but reverse that dreaded out-migration. Certainly, these are the goals of policymakers and citizens in other states but, given the geography of New Jersey, New Jersey policy makers and voters seem to have taken up this mission with more conviction.

The report finds that New Jersey lacks just as much in information, particularly when it comes to the planning and evaluating the performance of New Jersey’s many policies and programs. GPP finds New Jersey’s infrastructure to be one of its best assets, though still low. In “People,” New Jersey scores a B- which is half a grade higher than the national average. This despite the fact that many state-wide worries that people may be one of our biggest concerns, that human resources are trickling out of New Jersey at both ends. However, although New Jersey scores above average in this area, GPP finds New Jersey weak when it comes to “training and development,” the center of our worries at the nexus of new human resources and out-migration.

Building unity to support the new budget is another part of this fiscal shock and the process of New Jersey’s fiscal recovery. Treasury Department spokesperson, Tom Vincz has remarked that the findings of GPP’s report “shouldn’t come as a surprise” to New Jerseyans. Vincz notes that GPP’s report does much to “underscore the depth of the problem the governor is facing.” Descriptively, the report can do much to produce unity between policy makers and the citizenry, both suffering from the effects of middle childhood.

The report has served not only a descriptive but a prescriptive function. As Vincz notes, New Jersey’s OMB worked closely with GPP in order to produce the data for the report. We might therefore assume that, as a consequence of that relationship, trouble areas such as “Information” where New Jersey fell short must have emerged as obvious weak points in the budgeting process. Perhaps we ought to expect stronger similarities between GPP’s current grading criteria and New Jersey’s future budget and management strategies.

Looking back at “Money”, perhaps the fiscal shock behind and surrounding fiscal 2009’s budget will strengthen New Jersey in the areas of “Long Term Outlook” and “Structural Balance”, but for now, we’ll have to live with our weakness. It’s just part of the process.

We should not believe that New York and Pennsylvania have sucked the management or tangible resources out of New Jersey. However, it has become apparent that middle childhood has cause New Jersey to feed upon itself. It is a symptom of geography, those “mountains of conceit”, those keg taps, those B- grades at each end. It is unfortunate that those two mountains of well deserved conceit reach heights no greater than B-, which might be considered just above average.

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