• Population (rank): 6,313,520 (15)
• Average per capita income (rank): $22,781 (34)
• Total state spending (rank): $26,958,772,000 (18)
• Spending per capita (rank): $4,270 (42)
• Governor: Mitch Daniels (R)
• First elected: 11/2004
• Senate: 50 members: 17 D, 33 R
• Term limits: None
• House: 100 members: 51 D, 49 R
• Term limits: None
Overall Rating of a B which was much better than many states around.
Mitch Daniels didn't waste any time when he took over as governor of Indiana at the start of 2005. He talked the legislature into voting for Daylight Savings Time, ending a controversy that had dragged on for decades. And he set about privatizing large chunks of state government in order to encourage the competition that he felt would bring better performance in the end. Not all of it has helped Daniels politically. But the state's governmental structure has been changed in important ways.
Daniels' biggest privatization initiative was his move to lease the Indiana Toll Road to an international consortium. The deal brought an immediate $3.8 billion into the state treasury. While other states wait for federal aid that may never come, Indiana is busily designing and building a set of infrastructure improvements that will carry it well into the next decade.
With the infusion of all the Toll Road cash has come new challenges. The transportation department stepped up its planning to figure out how to spend such a large volume of money quickly and responsibly. A 400-project list was developed with the aid of sophisticated traffic projections, as well as citizen input solicited through extensive public meetings and upwards of 3,000 mailed questionnaires.
Building those projects presents significant personnel challenges in an industry that can barely provide enough engineers for the status quo. But the State Personnel Department — through a newly devised strategy of "embedding" central HR staff in the agencies — has concocted a plan for meeting the Department of Transportation's sweeping needs.
The personnel department has successfully fought for market-based salary adjustments for engineers and surveyors, implemented performance-based compensation and bonuses, courted talent from neighboring states and recruited retirees. It also has created a career path through which seasonal maintenance workers are trained to act as construction inspectors — which leaders hope will enable the state to meet the daunting goals of keeping these projects on time and on budget.
Information technology planning in Indiana has improved vastly with the consolidation of IT services — enterprise-wide planning was essentially non-existent in earlier administrations. "We couldn't have pulled this off without the governor giving us dictatorial capabilities," says Chief Information Officer Gerry Weaver. In the first few months after consolidation, feedback was solicited from the agencies that has been used to direct the CIO's efforts since.
Indiana has never excelled in managing for results, and the state has a ways to go. Still, Daniels is getting mileage out of some ideas he implemented at the federal level as the director of the Office of Management and Budget under President Bush. Indiana's new state-level Office of Management and Budget is using a version of the federal government's Program Assessment Rating Tool, which informs funding and management decisions by giving decision makers a snapshot of program performance. So far, Indiana seems to be getting better results with this system than the feds are. Through PROBE (Program Results: An Outcome-Based Evaluation), the state used 18 standard questions to evaluate 420 programs over the course of just 15 months.
While the PROBE time frame only allowed for a relatively superficial assessment, it constituted a significant step forward in a state where performance auditing had been essentially nonexistent. "The biggest finding was that over half of the programs couldn't say whether they were doing a good job or a poor job," says Cris Johnston, executive director of the Government Efficiency and Financial Planning Group within OMB. Johnston's group is devoting significant time and energy to helping the agencies develop better measures for their programs and linking those outcomes directly to employee performance and agency missions. This is no substitute, however, for an independent audit agency with a performance audit function — which the state would be wise to develop.