Which states earn label as 'best run'

Most voters probably think that American government - from Washington agencies to their own state capitals - is so inefficient that it couldn't run a dinner for two.

That might not be the case. Government today is running better than ever, according to a major new measurement effort.

Public bureaucracies aren't about to make executives at Microsoft Corp. or Ford Motor Co. jealous. But many have made major improvements in everything from their use of financial systems to organizational goals.

"Management matters ... both state governments and the federal agencies we studied are paying close attention to it," says Patricia Ingraham, director of The Government Performance Project, a public-affairs project of New York's Syracuse University.

Ms. Ingraham's effort, funded by the Pew Charitable Trusts, gave all states and a sampling of federal agencies a management report card, as if they were students. Categories studied ranged from financial management to human resources, information technology, and capital management.

The findings

* States, as a whole, are better run than the capital is.

Almost half the 50 states received a grade of at least a B for their management performance. That means they equaled all but the top-rated federal agency, the Social Security Administration.

That's good news for voters, because state governments are becoming increasingly important in their lives.

The massive welfare reform now under way is just one example of how authority, and funds, are now flowing from inside the Washington Beltway to the provinces.

* Good management doesn't follow a regional pattern.

Take the Deep South. Alabama was the lowest-rated state of all, with an average grade of D. But Virginia, another state of the old Confederacy, tied for the top with an A-minus.

Meanwhile, rich Connecticut was dragged down by its struggle to modernize state information systems, and thus rated only an average C-minus. The most populous states in the nation, California and New York, also did poorly.

On the whole, many states did better, or worse, than their image throughout the country might indicate.

Mention Louisiana government to many outside the Gulf region, and "corruption" might be the first word to spring to mind. Yet the Bayou State's pioneering use of performance measurements in state government earned it a high rating.

Similarly, West Virginia may not have the image of a financial powerhouse, but its skill at financial reporting has earned the state a number of Government Finance Officers Association rewards.

*One person can make a difference.

Strong leadership has turned around a number of troubled federal agencies, according to The Government Performance Project.

The Federal Emergency Management Agency might be a good example. Director James Lee Witt has transformed FEMA "from an impediment to disaster relief to a first-class customer focused organization," the GPP report says.

The Veterans Health Administration has been similarly transformed by Veterans Administration Undersecretary Kenneth Kizer, who has pushed through regional hospital networks.

"A strong vision for change among leadership at the top was common to all state governments and federal agencies receiving the best grades," Ingraham says.

Top rated states

Among states, the top rated were Utah, Missouri, and Washington, along with Virginia. What does it take to be a well-managed state?

Utah, for instance, gives its citizens detailed state financial information via state-funded newspaper inserts. It handles all state travel through a central agency, giving it the clout to negotiated fixed-rate contracts with various airlines.

Missouri's land and building administration is unusually good at tracking the condition of state infrastructure, and planning the investment necessary for repairs. Washington does all its budgeting via six and 10-year plans, while Virginia's computers are run by a powerful state chief information officer.

Consider the planning contrast with Alabama.

Last year, the Alabama governor and legislature decided to save money by cutting the work force. The state offered generous early-retirement incentives, which were accepted by 2,000 employees.

But the legislature did not set aside money to pay the early- retirement costs. State agencies ended up having to absorb the expense in their own budgets.

On the federal side, the Social Security Administration earned an A grade for its adroit use of technology. Some 82 percent of Social Security recipients rate the service they receive as good or better, according to the government project.

The Internal Revenue Service, on the other hand, remains the agency everyone loves to dislike - sometimes for good reason. Its computer systems remain decrepit. The last attempt to modernize them was scrapped in 1997, after an expenditure of $3.4 billion.