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OP-ED | Never Underestimate The Power Of Government Transparency

by Heath W. Fahle | Mar 15, 2013 2:04pm
(6) Comments | Commenting has expired
Posted to: Opinion

On Monday, March 11, the Finance, Revenue and Bonding Committee held a Public Hearing on a number of bills including Raised Bill 6566, An Act Concerning Transparency in Economic Assistance Programs. As the Deputy Director of the Yankee Institute, I testified in favor of the bill given the Yankee Institute’s unique experience with transparency efforts in Connecticut.

The Yankee Institute launched the Connecticut Sunlight Project in February 2010 to enable Connecticut’s taxpayers to review state government expenditures on a line-by-line basis. Over the past three years, our website CTSunlight.org received 1.6 million page views from almost a half million visits and it has grown to encompass nearly 2 million records.

This response is indicative of the public demand for information about how public funds are spent. The General Assembly took a significant step forward in this regard in 2010 with the passage of Public Act 10-155, An Act Requiring the Establishment of a Searchable Database for State Expenditures.

Raised Bill 6566 takes a logical “next-step” in the process started by Public Act 10-155 by making available to the public itemized data from the state’s various economic assistance programs. A number of states, such as Texas, Missouri, Massachusetts, and Nebraska already make such information available to the public in some form. The Missouri Accountability Portal, or MAP for example, is available online at mapyourtaxes.mo.gov, and makes business tax credit data available to the public in a very easy-to-use, searchable, data downloadable format.

Another section of the bill requires the Department of Revenue Services perform a tax incidence study to identify who actually bears the burden of each particular tax and fee assessed by the state. The legal incidence — who is identified by law as the taxpayer — may not actually be the taxpayer in practice. The question depends on the relative elasticity of supply and demand for a good or service. Some taxes can be passed on from producers to consumers easily in the form of higher prices if there are no good substitutes not subject to the tax. Identifying who bears the economic incidence of a tax will point to taxes that should be repealed or modified.

The bill also mandates that the Office of Policy and Management publish the governor’s proposed budget on the Internet in a database format and that the Office of Fiscal Analysis post the finalized budget online in a database format within 30 days of passage. In conjunction with the transparency infrastructure that already exists in the state, this bill will make useful tools available to the taxpayers of this state. Anyone that wants to will be able to be their very own budget hawk.

Conversations about transparency efforts are often subject to the sin of making the perfect the enemy of the good. There are many opportunities to compete the two against the other, especially on transparency efforts, but there is no real need to do so.

It is important to view these transparency efforts as part of an ongoing process, rather than a one-time event. Raised Bill 6566 is the next step in this process.

Heath W. Fahle is the Policy Director of the Yankee Institute for Public Policy and a former Executive Director of the Connecticut Republican Party. Contact Heath about this article by visiting www.heathwfahle.com


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(6) Comments

posted by: Lawrence | March 16, 2013  1:00pm

Thank you for supporting this bill!

posted by: HandyManny | March 16, 2013  2:55pm

I agree that negotiated incentives, that aren’t available to the public, should be disclosed.  But I don’t agree re: statutory benefits that are available to all in exchange for an investment or hiring that has been authorized by the General Assembly. 

Further, the MO portal only includes data from such negotiated incentives.  And the other states noted do not disclose all tax credits, only the ones typically subject to the larger negotiated deals that get a lot of press.

I support your overall transparency effort.  I just don’t believe that following the law, e.g. claiming a tax credit, should be treated any different than deducting a charitable contribution or using the property tax credit on the individual return.  No reason to publicly disclose that data.  If the credit or deduction doesn’t work per economic analysis, it should be repealed.  But if the General Assembly has authorized it, and continues to permit it, than don’t punish taxpayers for simply doing what was asked and was available to all.

posted by: Noteworthy | March 16, 2013  4:06pm

This is a very important bill; and in addition, there needs to be support for the bill introduced by the Comptroller Kevin Lembo requiring the publication of economic development expenditures and their results/accountability. There are lots of headlines about creating jobs and it’s being done with tens if not hundreds of millions in taxpayer funds. It should all be disclosed and there should be a look back to see whether we’re getting a bang for the buck or whether it’s just another welfare payment for which we’re becoming famous.

posted by: JAM | March 16, 2013  5:14pm

It would also be informative to require annual reports on the operating results, including the cost of debt service, of state run projects such as the Connecticut Convention Center, Rentschler Field, and others.

posted by: BrianO | March 17, 2013  9:14am

All government investments should be examined from a financial perspective to determine whether they accomplish purported goals.  This includes DECD and economic development, yes, but also DSS, Department of Labor, DCF, Dept. of Education and, of course, the Department of Corrections and Probation, with high incarceration rates and high recidivism—as crime plummets. 

Our expenditures need to make sense given the economic times in which we live.  Requiring meaningful financial analysis of government programs is a discipline that will appeal to conservatives who favor effective investments and progressives that believe government can design successful programs.  People from different political parties could actually work together on this issue.

posted by: DrHunterSThompson | March 19, 2013  7:35am

I like it when government is secretive and stealth.  Its not only funner it it seems more economical.

HST