Cronyism

Budget Transparency Increases Accountability in State Government

States that implement budget transparency provide the public with information on state spending in an effort to promote transparency and accountability in government. Budget transparency encourages fiscal responsibility and gives taxpayers the ability to track how their government spends their hard earned tax dollars.

Since adopting model language to promote budget transparency in 2007, ALEC has witnessed dozens of states pass comprehensive legislation to improve transparency and accountability by establishing central, searchable databases of government expenditures. In addition, while in the Senate, President Obama introduced the “Federal Funding Accountability and Transparency Act of 2006” to create a searchable database for federal funding.  These Web sites have streamlined the process of budget research, reduced the burden of paperwork on state agencies, and generated millions of hits, demonstrating real public interest in such an effort.

Budget transparency reduces potential fraud and corruption by opening the state ledger to the light of the public eye. In the past, one was required to wade through the layers of bureaucracy to research the details of state budgets. Today, government can harness the Internet to make that problem a thing of the past.

Many times, opponents of government transparency will attempt to stop legislation by talking about the potential costs of implementation. However, our experience with transparency legislation shows this to be an unsubstantiated concern. Time and time again, the actual implementation cost for budget transparency is significantly lower than the accompanying fiscal notes suggest.

For instance, the fiscal impact statement from the 2007 legislation passed in Oklahoma estimated the total outlay for programming and implementation at $300,000. However, budget transparency ended up costing taxpayers merely $8,000, plus staff time.Missouri’s budget office said its site was created “within existing resources.” Other states have similar experiences, such as Kansas, South Carolina, and Alaska, whose strides towards greater budget transparency and accountability were created at little additional cost to the taxpayer.

Furthermore, budget transparency has the potential to produce real, long-term budget savings. This has been the case in Texas since mid-2007, when its budget transparency legislation was implemented. Texas State Comptroller, Susan Combs, reported budget transparency has saved taxpayers $8.7 million so far. Texas achieved these savings by identifying wasteful spending – like contracts that could be consolidated, rather than duplicated, across agencies.

Moreover, other costs can be minimized by the creation of such a Web site. For instance, government agencies and employees will spend less time researching public records probing contracts and expenditures. Such Web sites will also encourage more competitive bidding for government contracts because the potential contractors can evaluate their ability and cost of taking on jobs, compared to their competitors. The savings go on and on, and it’s clear that whatever the upfront costs may be, overtime, greater budget transparency will pay for itself and more. Furthermore, budget transparency legislation would empower any interested citizen to investigate state finances. In seconds, they would be able to learn where the money came from, how it was spent, and who spent it.

With the establishment of a central, searchable Web site, the process of researching and understanding volumes of budget information would be simplified for all interested parties.  As Thomas Jefferson once said: “We might hope to see the finances of the Union as clear and intelligible as a merchant’s books, so that every member of Congress and every man of any mind in the Union should be able to comprehend them, to investigate abuses, and consequently to control them.”

 

 


In Depth: Cronyism

Cronyism in tax policy stifles innovation, hinders competition and introduces a deep temptation for corruption. The 2014 ALEC Center for State Fiscal Reform study, The Unseen Costs of Tax Cronyism: Favoritism and Foregone Growth, found that in the most recent year in which states published their respective tax expenditure …

+ Cronyism In Depth