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Testimony before the Joint Committee on State Administration and Regulatory Oversight

Good afternoon. My name is Deirdre Cummings and I am the Legislative Director for MASSPIRG. MASSPIRG is a 35 year old, non-profit, non-partisan, member-supported public interest advocacy organization that works to protect consumers, enhance public health, promote public transportation and foster responsive, democratic government. I am here today in full support of An Act Relative to Transparency in State Revenues and Expenditures, SB1410, and The Massachusetts Revenues and Expenditures Transparency Act, HB 2972,  filed by Senator Creem and Representatives Cabral and Kaufman along with 44 cosponsors including members of both the democratic and republican parties (these bills are essentially identical).

An Act Relative to Transparency in State Revenues and Expenditures  directs the Secretary of Administration and Finance to create and maintain a searchable website detailing the costs, recipients, and purposes for all appropriations, including contracts, grants, subcontracts, tax expenditures and other subsidies funded by the state government. The database will include all state revenue sources and expenses including the “quasi-public” agencies. The web portal would be accessible to the public and updated on a regular basis. 

Budget transparency, while not a new idea, can be revolutionary. Oversight of the public purse is a cornerstone of democratic government. A fully transparent budget allows citizens, the media, and watchdog groups to hold government officials, agency executives, government contractors and recipients of business tax breaks accountable. A transparent budget will help check corruption, bolster public confidence in government, and promotes fiscal responsibility and efficiency.

Budget transparency has become increasingly important as we face an economic crisis, a $5 billion budget shortfall, and a deterioration in public confidence in government as the third consecutive Speaker of the House has been indicted.

In 1802, President Thomas Jefferson called for similar openness in a letter to the Secretary of the Treasury, Albert Gallatin, “… 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.”  These words have never been more relevant.

In the last few years, at least 22 states have mandated that citizens be able to access a searchable online database of government expenditures. These states have come to define “Transparency 2.0” – a new standard of comprehensive, one-stop, one-click budget accountability and accessibility. State governments are putting their checkbooks and their IOUs on-line in a searchable format that makes information “Google-able” in the way that we’ve come to expect outside of government.

Experience from the leading Transparency 2.0 states shows that these web portals are effective, low-cost tools that bolster citizen confidence, reduce contracting costs, and improve public oversight.  The popularity of these sites can be seen in the millions of visits by citizens to Missouri’s Accountability Portal website and in the increased number of businesses bidding for government contracts on Houston’s transparency website.  Meanwhile, Texas’ Comptroller reports her agency saved $2.3 million by using its transparency website to make its administration more efficient. Estimates suggest that transparency websites save millions more by reducing the number of information requests from citizens and watchdog groups and by increasing the number of bids for public projects. The biggest savings may be from avoided scandals that we will never need to hear about. And, as the Big Dig shows, lack of monitoring and late recognition of fraud can cost billions.

In December 2008, we released Transparency.gov2.0, a report that documents the accelerating trend toward budget transparency in other states, and examines the benefits of this improved transparency, outlining best practices in other states. When we released the report in December we found at least 18 states mandate that citizens be able to access a searchable online database of government expenditures. In the last 6 months, 4 more states have adopted transparency 2.0, bringing the total to 22.  I have provided a copy of our full report and an updated list of states as part of my testimony.
 
While each state is different, the Transparency 2.0 tools have common characteristics:

  • Comprehensive:  A user-friendly web portal provides citizens, lawmakers, businesses, and public watchdogs the ability to search detailed information about contracts, spending, subsidies or special tax breaks anywhere in state government including the so called quasi-public agencies.
  • One-Stop:  Citizens can search all government revenue and expenditures on a single website. Finding information should be easy, even without knowing exactly where to look.
  • One-Click Searchability:  Citizens should be able to search with a single query or to browse common-sense categories. Consider how difficult finding information on the web would be without search engines. Locating data on government expenditures should be possible by recipient, amount, legislative district, granting agency, purpose, or keyword.

Despite Massachusetts’ “high-tech” reputation, we have only barely begun to take advantage of these tools. State contracts and a growing number of business subsidy programs remain largely outside of public scrutiny. We can no longer afford such lack of accountability.

Given the current economic challenges we must consider cost. And the good news is that the benefits of online budget transparency websites have come with a surprisingly low price tag. The federal transparency website – which allows citizens to search federal spending totaling over $2 trillion a year – cost less than $1 million to create. Missouri’s website – which is updated daily and allows its citizens to search state spending totaling over $20 billion a year – was mandated by executive order and was created entirely with existing staff and revenues. Washington spent $300,000 on their web portal. Nebraska has spent $38,000 for the first two phases of its website. Oklahoma’s Office of State Finance created its transparency website with $40,000 from its existing budget. And in February, Rhode Island launched their website at no cost to taxpayers with software they developed in-house.

The Commonwealth should become a leader in budget transparency. Doing so will help rebuild the frayed public trust in government. It will help us make better choices together about investments in our community. We all have a stake in the success of our schools, transportation system, public health and other public structures.

I hope you will pass the bill quickly from your committee.

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