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State gets higher mark on national report card

The Associated Press
Tuesday January 30, 2001

SACRAMENTO — California’s state government is scoring higher marks on a national report card, particularly in fiscal policy, but still ranks behind most other states, a new study shows. 

California’s overall grade jumped to C+ this year from C- two years ago. The state still ranked near the bottom overall, with only 11 states having lower ratings, according to the report card. 

The report, “Grading the States: A Management Report Card,” was scheduled for release Tuesday in Washington, D.C. The Maxwell School of Syracuse University and Governing magazine produce the report card. 

The study, funded by The Pew Charitable Trusts, grades state governments on how well they are managing systems that deliver public service. 

The 50 states were given grades on how well they managed five areas: finances, capital, human resources, results and information technology. 

California’s grade for financial management leaped from a C- in 1999 to a B- in the current report. 

“Many of California’s most egregious finance problems of the late 1990s have been cleaned up. Perhaps most important, the state showed a positive balance of $622 million at the start of the 2000 fiscal year,” the magazine wrote. 

“We were impressed that the state had begun to set aside money in a rainy-day fund, which it had not done before, that it had brought itself out of debt, that it has passed its budget on time,” said Katherine Barrett, special projects editor for Governing magazine. 

However, Gov. Gray Davis is dipping into that reserve to buy energy to keep California lights on. The Legislature approved $400 million for emergency power purchases that has already run out and Barrett said the state’s power problems could present problems. 

Lawmakers are considering a long-term plan to put California in the energy-buying business for years, possibly financed by state-issued revenue bonds rather than the state’s general fund. 

Earlier this month, Standard & Poors put California’s general obligation bonds on “credit watch with negative implications” because of the possibility the state could end up buying power long-term and deplete its currently ample reserve. 

Davis spokeswoman Hilary McLean said the improved grades “are recognition that California is moving in the right direction.” 

She said while the $400 million spent to buy power is coming out of this year’s reserve, Davis hopes “the state will get that money back” from utilities or ratepayers once the Legislature and governor approve some long-term solution to the energy crisis. 

California’s other grades were C+ (up from C-) for capital management, C (up from C-) for human resources, C- for managing for results (the same) and B- (up from C+) for information technology. 

Three states, Michigan, Utah and Washington, had the top grades of A-. Twenty-six states had B grades and 21, including California, were in the Cs. The lowest grade was C- for Alabama.