Vikki Smith: Innovation and Education Champion
Vikki Smith recently retired from the Washington State Department of Revenue. She has worked her entire career at Revenue and served in a variety of leadership positions including Assistant Director for Taxpayer Services, Chief Information Officer and Deputy Director.
In 2015, Vikki was appointed by the Governor and confirmed by the Washington State Senate to serve as the Director of the agency. As Director, Vikki oversaw the agency’s transition from 40 disparate legacy systems to a single tax and licensing system; championed the “voice of the customer” approach to customer service; and continues to advocate for effective stakeholder and government to government relationships through the creation of the agency’s Business Advisory Council, the Tribal Tax Advisory Group and the annual Washington State Tax Conference.
Russ: Vikki, we worked together for so many years it is a distinct pleasure for me to be able to talk with you today about your amazing career and the insights you’ve gained from and about taxpayers, and about how to be an effective and innovative tax administrator.
Let’s start with your career. It’s not just anyone who can start as a temporary clerk and rise to agency Director. You also received the Harley Duncan Award for Leadership and Service in 2012. That’s the greatest accolade a tax administrator can receive. What is it about the Department of Revenue that made for you a 50 year career?
Vikki: I certainly didn’t think when I started as a temporary clerk that I would retire after 51 years in tax administration. It was because I had the opportunity to work with such amazing and dedicated employees and leaders. In addition, I got the opportunity to promote, take on more complex assignments and implement some crazy ideas. As we all know, our tax laws are not only complex but constantly changing. Each day brought a new challenge, so I never felt bored.
I also think I had a calling to serve the public. I took pride in the agency and the fact that the revenue that was collected helped fund critical services for Washingtonians.
Russ: I want to focus on taxpayer education for a moment. You will recall we worked with Speaker Ballard on a study of Taxpayer Rights and Responsibilities. He and Revenue Chair Wang became convinced additional budget for the Department should be provided so that we could educate taxpayers about their rights and obligations. They wanted us to provide materials in plain language that would assist taxpayers in their voluntary compliance. You led the first agency division that championed that effort. When you look back on it, what did you, and the agency learn from that experience?
Vikki: I do remember the study and the day that I was asked to become the agency’s first Taxpayer Rights Advocate. My division, Taxpayer Services, was asked to look for ways to implement the recommendations. I created a team and they were dedicated to the Plain Talk effort reviewing all the special notices and form letters. The goal quite simply was to make them easier to read and understand.
I am proud that the agency still believes in the principles and has been recognized nationally. The agency has provided training to other state revenue organizations over the years. Plain talk is so easy to implement, and it confirmed my belief that taxpayers want to report and pay correctly. Businesses, especially small business owners, should spend time running their companies, not trying to read and reread something and then end up calling the agency.
Russ: In what ways did the study and education efforts that came out of it change the culture of the Department of Revenue?
Vikki: Every function we perform at the department is critical and necessary to achieving performance goals, meeting our revenue commitment and statutory requirements. When I think about the study and how we embarked on outreach and education I believe it resulted in a better balance. It changed our understanding about how cost-effective outreach and education can be and how it benefits our customers. Audit and collection activities are needed but I have always believed we educate first to provide an opportunity for taxpayers to voluntarily comply.
Russ: You have a strong technical background, having worked in leadership positions related to Information Services. In your mind, what are the most useful ways for a revenue agency to embrace technology. And what are some of the pitfalls to avoid?
Vikki: Leveraging technology is essential to providing robust online experiences for staff and the customers. Technology helps meet increasing workloads while dealing with limited resources. Taxpayers want and demand secure online services.
I served as a member of Washington’s Technical Services Board and was the acting CIO and director of the central IT department for six months. Combined with my experience as the agency’s CIO I was able to develop a strong technical background. This allowed me insight into not only how to embrace technology successfully but also how to recognize the pitfalls.
In terms of pitfalls, I have seen major projects in other agencies fail due to not having an effective project manager. If you don’t have the in-house expertise, it is important to hire an outside consultant. This is a deal breaker if you don’t have someone with experience and may result in the project failing.
The other thing I have witnessed is not having an executive sponsor. When you are spending millions of dollars it is critical that someone is monitoring the success of the project at the executive level. That individual should manage and watch for scope creep, make sure milestones are met and the project stays within the appropriated funding.
The other factor I witnessed is never underestimate the need for organization change management. It is critical to project success and should be included in the budget request. You don’t want to build a system no one wants to use and constantly complains about.
Finally, is the need to address fraud mitigation and the bad actors constantly trying to hack the systems. You don’t want to find yourself in the newspaper and having to explain to your customers what happened. I was lucky and we never found the agency in this position. Last thought on this question is to find yourself a top-notch IT security individual.
Russ: You were often selected to lead team projects. What are some of the projects you led you are proudest of?
Vikki: When I think about this question, I recall many different projects in which I have been involved in over my career. These range from implementing major technology solutions, to creating a targeted education program, establishing a business council and most recently a tribal tax advisory council comprised of DOR staff and tribes located in Washington.
Russ: The projects you led and participated in often involved significant changes in how the agency operated. In all large organizations change is often met with resistance or indifference. You were always able to overcome that and create a culture in which line employees not only accepted change, but often championed it. What kinds of strategies did you use? How did employees come to realize the benefits of active participation in making change?
Vikki: The department has always embraced the idea of continuous improvement. To be able to work in this type of environment has been wonderful. Maybe it was dumb luck, but I seemed to always have phenomenal team members that worked with me championing new ideas. They were smarter than I, had diverse opinions and backgrounds. In many cases, they became ambassadors and helped communicate the importance of the change.
One other strategy I used was to try to understand why some may have a problem or question the need for change. It is important to talk with them to understand their point of view. Take that information and see if it has merit and make changes if necessary.
Russ: What are the most important things you have learned from the Revenue Family at DOR, business leaders, other agency heads, and ordinary taxpayers?
Vikki: I would also add other tax commissioners/directors across the nation to your list. I am a firm believer that you should never think you know all the answers. Each of those you have listed have been valuable resources for me over the years. I have found they willingly share information when asked. Better decisions and a path forward come from listening and learning from others.
Russ: If you could make any changes to substantially improve the efficiency and effectiveness of the sales tax system, both in Washington, and nationwide, what would you choose?
Vikki: Continued efforts in uniformity. As with most states, sales tax is one thing we have zero authority to settle. So having a system that is uniform and easy to administer goes a long way in helping taxpayers report and pay correctly.
In Washington, I would love to have a single rate across the state but that is a proverbial pipe dream.
Russ: What do you think taxpayers, both individually and collectively, could or should do to improve the sales tax system and make compliance easier for themselves, their customers, and the public servants with whom they deal?
Vikki: Promoting voluntary compliance through outreach and education is critical. It starts with looking for ways to actively engage taxpayers and tax professionals. Taxpayers can help the agency by explaining the difficulties they experience when reporting and paying their taxes. This isn’t just with implementation of new legislation but also existing laws. Taxpayer feedback helps the agency provide information that is clear, timely and easy to understand. I believe it directly benefits the taxpayers by helping them avoid the risk of compounding costly errors.
Russ: I know of lots of difficult challenges you faced – technical, managerial, cultural – as an agency manager and leader. I can recall you saying “Oh, Lord!” on occasion. But there was usually a lilt to your voice when you said it. Your “Oh Lord!” seemed to encapsulate both a recognition of the size, complexity, and difficulty of a challenge, as well as an eagerness to take it on. That’s really more of a comment than a question. But I would invite you to comment if you like.
Vikki: I was always eager to take on new assignments, but I was also cognizant of the potential to fail. So, my comment was more along the line of thinking I am really going to need help. At the back of my mind I was also wondering how many more priority projects we really could take on without risk of failure.
Russ: It would be malpractice on my part, given your extraordinary career, not to ask you to advise those starting out what you think are the key things to make the most of every job.
Vikki: In looking back, I was lucky to have others that I would consider a mentor. When you start a new job look to see who you respect and learn from them. Ask for advice. Don’t be afraid to take on new opportunities. Develop work relationships internally and externally. Be approachable and kind. Pay it forward. Work hard but have fun.