No Excuses Anymore for States to Keep Their Checkbooks Private
Just how much does that new highway project actually cost? For Ohio residents, this is an easy question to answer—Ohio’s new state spending portal makes detailed spending data publicly available and easy to analyze. Residents can drill down to infrastructure spending for a given time period or project and view individual payments, identify how much the Ohio Department of Transportation is spending on construction contracts, and see to whom these checks are going. California residents, on the other hand, could not answer that question as the state provides little granular spending data whatsoever. Many states have gotten on board with checkbook-level financial transparency in recent years, but a handful still have a long way to go, and their accountability suffers as a result. These lagging states should look to leaders like Ohio to identify how they can improve access to this data, and all states should continuously expand and improve their spending data portals.
A recent report by the Federation of State Public Interest Research Groups (U.S. PIRG) ranking all 50 states on how well they provide online access to government spending data gave Ohio and 31 other states an “A” or “B” grade for having user-friendly data portals that have a wide variety of highly detailed government spending data, including information on subsidies, rather than just payments. 13 states earned a “C” grade for failing to include significant information about “off-budget” expenditures, such as subsidies and spending from agencies that collect their own revenue through the use of fees or other methods. And five states, including California, received a “D” or “F” for having little-to-no checkbook-level data on spending of any kind. And, the data these states do provide is often spread out across multiple agencies and websites, making it difficult for users to access and compare.
Checkbook-level open spending data does not just exist to satisfy public curiosity. On a national level, open data supports $1.1 trillion in economic value every year by serving as the building blocks for new products and services in the private sector. For government, open financial data is a potent tool to crack down on fraudulent or wasteful spending. For Ohio, this data allows journalists, civil society groups, or simply concerned citizens to, for example, identify when a particular construction company is awarded an abnormally high number of contracts for highway repairs, which could indicate favoritism or other illicit activity and spur an investigation. States that lag in adopting strong spending data publishing requirements unnecessarily sacrifice financial transparency and risk wasting taxpayer dollars.
Fortunately, building robust spending data portals would cost states little—even states with the highest functionality portals did not spend more than $900,000 in start-up or operating costs, and most cost significantly less. (Note that the source cited above lists Mississippi’s portal as having $2.2 million in startup costs. However, this figure indicates the cost of an upgrade to Mississippi’s entire state government IT system, which included the creation of Mississippi’s state spending portal.) For example, Wisconsin and Louisiana, which also earned an “A” for their portals, spent $160,000 and $325,000 in start-up costs, respectively. In comparison to California’s $167.6 billion budget, this would be just a drop in the bucket. Beyond a portal that makes it easy for the public to analyze this data in a consolidated location, states need only to look to best practices to understand what data should be available. States should publish the same level of details of expenditures as found in a checkbook—the recipient and amount of funds, the date of the payment, the reason, the check-writing agency, and the transaction identifier, such as check number, should all be publicly available in standardized and machine readable formats. Additionally, subsidy spending and off-budget spending should receive the same treatment—just because a fee-collecting agency may not rely on taxpayer funds, it still should adhere to high levels of transparency so the public can hold it accountable. And all states, regardless of their current standing, should pursue the expansion of open financial data, such as data on public-private partnerships. Finally, portals should focus on making the data usable to the average citizen, with built-in visualization and analytics tools that do not require a data science education to use.
As states work to improve their open spending data efforts, they should engage local governments to publish their financial data as well. Municipal governments, which may view building their own independent portals as too daunting, should have the option to house their data on state portals and receive technical assistance from state administrators. For example, Ohio’s treasurer Josh Mandel in April 2015 invited over 18,000 townships, cities, county governments, and even school and library boards to contribute their data to Ohio’s spending portal. Ultimately, the goal for open spending data should be to make details about how the government spends every single taxpayer dollar available to the public. This goal may not be far off—in the six years that U.S. PIRG has conducted its analysis, all states have consistently improved and data on state spending is dramatically more open today than six years ago.
Image: Bob Hall.