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Massachusetts’ quasi-public agencies fail to disclose basic spending information online, despite the fact that their combined budgets represent 33% of additional government activity that is not included in the state budget or covered by the normal oversight process. A new report released today by MASSPIRG, Out of the Shadows: Massachusetts Quasi-Public Agencies and the Need for Budget Transparency provides the first combined tally of the budgets of quasi-public agencies and their level of budget transparency.
According to the report, Massachusetts’ 42 quasi-public agencies operate largely under the budget radar despite performing vital government functions, delivering essential services such as public bus and rail systems, delivering drinking water, building new schools and managing public pensions. “The good news is that the House just passed new rules requiring all state spending and revenue, including quasi-publics, to be disclosed to the public on a state spending website,” said Deirdre Cummings, Budget and Policy Director for MASSPIRG. “If adopted by the Senate, government transparency and accountability will be greatly enhanced.”
Quasi-public agencies are publicly chartered bodies, such as the MWRA and the MBTA. They are controlled by government-appointed boards and established by the legislature to perform a public function. They are not fully public because they operate independently of the legislative and executive branches and do not principally depend on state general funds for operation. They cannot be classified as private entities because they are governed by state appointees and are typically endowed with public powers to collect fees or other revenues, as well as to perform public functions.
“Quasi-public agencies play a critical role in delivering public services, but they don’t always get the scrutiny they deserve. This report makes a clear and timely argument for reforms to improve the performance and accountability of Massachusetts’ quasi-public agencies,” said Alasdair Roberts, Rappaport Professor of Law and Public Policy at Suffolk Law School.
The 42 state and regional authorities found in the report ranged in size from 6 to 6,000 employees. The 41 quasi-public agencies for which any budget information could be obtained showed combined annual budgets amounting to $8.76 billion in fiscal year 2008. By comparison, the state budget was almost $27 billion. Thus, the quasi-public agencies represent almost one-third additional government activity that is exempt from even limited normal transparency and oversight rules.
“Because quasi-publics are not directly accountable to the legislature and exempt from many kinds of public oversight, their decisions and budgets should be more – not less – open to public scrutiny. This report shows the opposite is currently true,” said Cummings. “Detailed information should be publicly disclosed and readily available about expenditures, revenue and debt, as well as about outside contracts and internal governance. The Internet makes it easy to provide ready access to this information at minimal cost.”
Among the other findings of the new study, which used data from public audits, online searches and public records requests:
• While all the agencies have Web sites, only 15 provide relatively complete budgetary information and none are provided on the state’s budget Web site (mass.gov).
• Some quasi-public agencies appear to perform as models of efficiency and good government; others have seen repeated scandals and cost overruns.
• A quarter century ago, the Massachusetts Senate convened a commission to examine quasi-public agencies and recommended disclosure of all off-budget spending and revenues and “that uniform, regular reporting requirements be imposed and enforced on all authorities.” Only limited reforms have taken place during the 25 years since.
• At least 32 states have established online, budget and spending transparency Web sites that give users access to checkbook-level data on government spending and allow users to make directed searches. Unlike Massachusetts, New York’s state budget Web site includes budget information on quasi-public agencies.
• Budget transparency Web sites with checkbook-level disclosure have proven to be an inexpensive tool to monitor and improve government spending. Missouri’s Web site, which is updated daily and allows citizens to search state expenditures totaling over $20 billion a year, was created entirely with existing staff and revenues.
Massachusetts has made some strides toward improving government budget transparency, but quasi-publics have been largely exempt from these efforts. The Commonwealth’s cutting-edge procurement system already puts some government contracts online, but not those of quasi-publics. Last year a comprehensive new inventory of state debt included quasi-publics, but was not integrated with online budget disclosure. Massachusetts has been a leader in publicly disclosing information about spending of stimulus funds from the federal American Recovery and Reinvestment Act by posting all contracts online.
Said Cummings, “Citizens increasingly expect that government expenditures will be posted online and easily accessible through a Google-like search function.” The report calls for a number of reforms, including for the Commonwealth’s centralized Web site, mass.gov, to provide budget information on all government organizations and agencies, including quasi-publics, modeled on best practices established by at least 32 other states. The House recently adopted language as part for their FY2011 budget that would include transparency for quasi-publics as part of broader spending disclosure that includes spending on tax credits. Attention now moves to the Senate, which will debate the budget next week.
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