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Following the Money 2011How the 50 States Rate in Providing

Online Access to Government Spending Data

Following the Money 2011


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Following the Money 2011How the 50 States Rate in Providing

Online Access to Government Spending Data

Benjamin Davis,

Frontier GroupPhineas Baxandall and Jeffrey Musto,

U.S. PIRG Education Fund

March 2011

Iowa PIRG Education Fund


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The authors would like to thank the following individuals for providing analysis, editorialassistance, and review for this report: Francisca Rojas, Post-Doctoral Research Fellow inthe Transparency Policy Project at Harvard Kennedy School; Philip Mattera, ResearchDirector of Good Jobs First; Jon Bartholomew, Democracy Advocate of OSPIRG; Deir-dre Cummings, Legislative Director of MASSPIRG; and Serena Unrein, Public InterestAdvocate of Arizona PIRG. Thanks also to Tony Dutzik and Rob Kerth at Frontier Groupand Carolyn Kramer for their editorial assistance.

This report is made possible through the generous support of the Ford Foundation.

The authors bear any responsibility for factual errors. The recommendations are those ofIowa PIRG Education Fund. The views expressed in this report are those of the authorsand do not necessarily reflect the views of our funders or those who provided review.

Copyright 2011 Iowa PIRG Education Fund

With public debate around important issues often dominated by special interests pursu-ing their own narrow agendas, Iowa PIRG Education Fund offers an independent voicethat works on behalf of the public interest. Iowa PIRG Education Fund, a 501(c)(3) or-ganization, works to protect consumers and promote good government. We investigateproblems, craft solutions, educate the public, and offer Iowans meaningful opportunities

for civic participation. For more information, please visit our website at www.iowapirg.org/edfund.

Frontier Group conducts research and policy analysis to support a cleaner, healthier andmore democratic society. Our mission is to inject accurate information and compellingideas into public policy debates at the local, state and federal levels. For more informationabout Frontier Group, please visit our website at www.frontiergroup.org.

Cover photo: Nikada PhotographyLayout: Harriet Eckstein Graphic Design

Acknowledgments


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Table of Contents

Executive Summary 1

Introduction 7

Transparency 2.0 Websites Empower Citizens toTrack Government Spending 9

States Continued Progress Toward Transparency 2.0 in 2010 15

Making the Grade: Scoring State-Level Progress Toward Transparency 2.0 23

Many States Have Improved their Websites BeyondBasic Transparency 2.0 Standards 29

State Officials Face Obstacles and Challenges inOperating Transparency Websites 36

Continuing the Momentum Toward Greater Transparency:Challenges and Recommendations 38

Appendix A: Transparency Scorecard 40

Appendix B: Methodology 42

Appendix C: Agencies or Departments Responsible forAdministering Transparency Websites by State 56

Notes 58


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Executive Summary

The ability to see how government usesthe public purse is fundamental todemocracy. Transparency in govern-

ment spending checks corruption, bolsterspublic confidence, and promotes fiscal re-sponsibility.

State governments across the countryhave been moving toward making theircheckbooks transparent by creating online

transparency portalsgovernment-oper-ated websites that allow visitors to see whoreceives state money and for what pur-poses. Forty states provide transparencywebsites that allow residents to access da-tabases of government expenditures withcheckbook-level detail.1 Most of thesewebsites are also searchable, making iteasier for residents to follow the moneyand monitor government spending.

This report is U.S. PIRG Education

Funds second annual ranking of statesprogress toward Transparency 2.0anew standard of comprehensive, one-stop,one-click budget accountability and acces-sibility. (See Figure 1 and Table 1.) Thepast year has seen continued progress, with

new states providing online access to gov-ernment spending information and severalstates pioneering new tools to further ex-pand citizens access to spending informa-tion and engagement with government.

In 2010, at least 14 states either cre-ated new transparency websites or madesignificant improvements to sites alreadylaunched.

Six statesArizona, Indiana, Massa-chusetts, Michigan, New Hampshire,and Wisconsincreated new transpar-ency portals in 2010. Highlights fromthe new websites include:

o Arizonas new website allowsresidents to monitor most stateexpenditures. The website isaccessible both to researchers whoknow what they are looking for and

non-technical citizens who arevisiting the site for the first time.

o Indianas new website is at theleading edge of Transparency 2.0,providing detailed information for

Executive Summary 1


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Figure 1: How the 50 States Rate in Providing Online Access to GovernmentSpending Data

residents to track many forms ofgovernment spending, revenue andperformance.

o Massachusetts new website sets astrong standard for presenting taxexpenditures by displaying the costand description of each tax expendi-ture program.

Many states over the past year notablyimproved their transparency websites.

For example:

o New Jersey and South Dakotaupgraded their websites so theynow provide checkbook-level detail,allowing visitors to track the pay-ments made to specific vendors.

o Louisiana made various improve-ments to its website over the pastyear, making it now among thenations best.

o Oregon embedded data viewingtools into its website that allowusers to search through financialdata, download their search results,and create maps and charts.

Forty states transparency websites

now provide checkbook-level informa-tion on government spending.

Forty states allow residents to accesscheckbook-level information aboutgovernment expenditures online. (SeeFigure 1 and Table 1.) The majority of

2 Following the Money 2011


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Confirmation of Findings with State Officials

U.S. PIRG Education Fund researchers sent initial assessments to transparencywebsite officials in all states and received feedback from such officials in 39 states

to ensure that the information in this report is accurate and up-to-date. Websiteofficials were given the opportunity to alert us to possible errors, clarify their on-line features, and discuss the challenges to achieving best practices. Their com-ments are discussed in the section entitled State Officials Face Obstacles andChallenges in Operating Transparency Websites.

Transparency 1.0

Incomplete: Residents have access to

only limited information about public

expenditures. Information about

contracts, subsidies, or tax expenditures

is not disclosed online and often not

collected at all.

Scattered: Determined residents who

visit numerous agency websites or make

public record requests may be able to

gather information on governmentexpenditures, including contracts,

subsidies, and special tax breaks.

Tool for Informed Insiders: Researchers

who know what they are looking for

and already understand the structure of

government programs can dig through

reports for data buried beneath layers

of subcategories and jurisdictions.

Transparency 2.0

Comprehensive: A user-friendly Web

portal provides residents the ability

to search detailed information about

government contracts, spending,

subsidies, and tax expenditures for all

government entities.

One-Stop: Residents can search all

government expenditures on a single

website.

One-Click Searchable: Residents can

search data with a single query or browse

common-sense categories. Residents can

sort data on government spending by

recipient, amount, legislative district,

granting agency, purpose, or keyword.

Residents can also download data to

conduct detailed off-line analyses.

Transparency 2.0 Is Comprehensive, One-Stop,One-Click Budget Accountability and Accessibility

Executive Summary 3


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these states (37) also enable residentsto search for expenditures by vendorname or type of service purchased.

o Nine of these states are lead-ing states in the transparency

movement, hosting searchable,user-friendly websites that providecomprehensive information on arange of government expenditures.Most of these states provide de-tailed information on the grants andeconomic development incentivesawarded to companies and organiza-tions; all but one allow visitors tomonitor the funds forgone everyyear through tax expenditures; andmore than half provide completecopies of contracts.

o Thirty-one states are emergingstates with transparency websitesthat provide less comprehensiveinformation or, in some cases, arenot easily searchable. Some of thesestates allow citizens to track trendsin state spending over time andmost of these states allow citizensto find out some details on specific

state purchases from particularvendors.

Ten other states are lagging states,whose online transparency efforts failto meet the standards of Transparency2.0.

o Nine of these states have taken thepositive step of creating spendingtransparency websites, but thesesites lack many important Transpar-

ency 2.0 aspects, especially vendor-specific information on governmentspending.

o One state does not host a govern-ment spending transparency websitethat is accessible to the public.

Red states and Blue states haveboth embraced spending transparency.The ranks of leading states are splitroughly equally between those thatvoted Democratic in the last presidentialelection and those that voted Republican.

In fact, the average score of Obama-votingstates is almost exactly the same as that ofMcCain-voting states.

Many states are improving theirwebsites beyond basic Transparency2.0 standards, empowering residentsto monitor government spending inunprecedented ways.

More powerful searches: Maryland andNew York have made tracking vendor-specific payments easier for residentsso they can now easily search for thevendors location or the month thepayment was awarded, or easily distin-guish grants from contracts.

More sources of data: Maryland, Ohio,and Virginia have posted new sets offiscal data to their sites, such as dataon state loans, bonded indebtedness,and registries of state property.

More ways to engage citizens: States suchas Utah and Texas have added toolsto their websites to increase citizeninvolvement, such as providing a glos-sary of terms (empowering users withthe knowledge to navigate complexfinancial terminology) and surveys onthe sites performance.

All states, including leading states,have many opportunities to improve

their transparency websites.

Most transparency websites do notprovide detailed information on gov-ernment contracts. Even some of theleading websites provide only a shortdescription of the purpose of contracts.



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Table 1. How the 50 States Rate in Providing Online Access to GovernmentSpending Data

Only about half of the websites allowusers to download datasets in formatssuch as Excel, enabling more detailedoff-line analysis of government spend-ing data.

Only 26 states include spending dataprior to Fiscal Year 2009.

Only 14 states provide links to theirtax expenditure reports.

Only 14 states provide any informa-tion about local government spending.

Only four states provide the mostcomprehensive level of informationon grants and economic development

incentives awarded to companies andorganizations.

STATE GRADE SCORE

Mississippi C 70

Utah C 70

Oklahoma C- 66

Rhode Island C- 66

South Dakota D+ 63

California D+ 62

Delaware D+ 61

New Mexico D+ 61

South Carolina D+ 61

Wisconsin D+ 61

Florida D 59

Vermont D 55

Wyoming D- 50

Tennessee D- 49

Alaska D- 47

Connecticut F 39

Iowa F 32

Arkansas F 28

West Virginia F 28

Washington F 22

Montana F 16

New Hampshire F 7

Idaho F 6

North Dakota F 6

Maine F 0

STATE GRADE SCORE

Kentucky A 96

Texas A 96

Indiana A- 93

Arizona A- 92

Louisiana A- 92

Massachusetts B+ 87

North Carolina B 85

Ohio B- 82

Oregon B- 82

New Jersey C+ 78

Pennsylvania C+ 78

Virginia C+ 77

Missouri C+ 76

Alabama C 74

Georgia C 74

Nevada C 74

Illinois C 73

Kansas C 73

Minnesota C 73

New York C 73

Hawaii C 72

Maryland C 71

Nebraska C 71

Colorado C 70

Michigan C 70

Executive Summary 5


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In the next year, state governmentsacross the country should strive toimprove government transparencyand accountability online. Leadingstates should advance the Transparency2.0 movement by continuing to develop

innovative functions that elevatetransparency and citizen involvement.Emerging states should follow the example

of the leading transparency states byimproving the search functions on theirwebsites and increasing the amountof information available to the public.Lagging states need to join the ranksof Transparency 2.0 governments by

establishing one-stop, one-click searchablewebsites that provide comprehensiveinformation on government expenditures.



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Across America, states face excru-ciating choices forced by fallingrevenue from the economic down-

turn. From 2008 to 2010, state revenues

declined almost 12 percent ($78.5 billion).

2

In response, stateswhich are generallyrequired to pass balanced budgetshavebeen forced to make major cuts in spend-ing. According to the National GovernorsAssociation, states spent 6.8 percent lessin 2010 than in 2009.3 At the beginningof 2011, state budget crises show no signsof abating. California, for example, fur-loughed most of the 230,000 employees inthe states executive branch, and still facesa budget gap exceeding $25 billion.4 To fix

this, Governor Jerry Brown plans to lay offfirefighters, reduce the pay of 63,000 stateemployees, and eventually cut jobs by 25percent in some state departments.5

As states are forced to make difficultbudgetary decisions in tough economic

times, it is even more important for thepublic to be able to understand how taxdollars are spent. Opening the govern-ments checkbook empowers citizens to

involve themselves in budgetary debatesand to act as watchdogs to ensure that thegovernment spends money fairly andefficiently.

An overwhelming majority91 per-centof Americans believe state officialshave a responsibility to provide financialinformation to the public in a way that isunderstandable to average citizens.6 Thisis not some abstract desire. Polls indicatethat thirty percent of the public have tried

to search the Web for information abouthow their state government raises andspends taxpayer dollars.7

However, people often lack adequateinformation on state expenditures. Ac-cording to the Association of Government

Introduction

Introduction 7


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Accountants 2010 report, 48 percent ofpeople are either not very satisfied ornot at all satisfied with the state govern-ment financial management informationthey receive.8

For citizens in a growing number ofstates, government spending transparencywebsites play a key role in closing this in-formation gap. In 40 states, citizens haveaccess to checkbook-level data on govern-ment expenditures, with citizens in mostof those states able to access the informa-tion through a searchable database. (SeeFigure 2.) These states have come to de-fine Transparency 2.0a new standardof comprehensive, one-stop, one-clickbudget accountability and accessibility.

In the past year, many states made prog-ress toward Transparency 2.0. Some stateshave launched completely new websites,and others have made improvements toexisting sites. These changesreviewedhere in our second annual report on state

government budget transparencyshowthat Transparency 2.0 is a growing move-ment that is picking up momentum acrossthe country.

With greater spending transparency,states can better ensure that taxpayerfunds are spent wisely. This report pro-vides a benchmark of where each of the50 states stands in that process and howthey have improved over the course ofthe last year.

Figure 2: Example of a Checkbook-Level Website: North Carolina

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Government spending transparencywebsites that meet the standard ofTransparency 2.0 give citizens

and government officials the ability to

monitor many aspects of state spendingsaving money, preventing corruption, andencouraging the achievement of a wide va-riety of public policy goals.

Transparency 2.0 WebsitesGive Users Detailed

Information on GovernmentExpendituresWebsites that meet Transparency 2.0 stan-dards offer information on governmentexpenditures that is comprehensive, one-stop, and one-click.

ComprehensiveTransparency websites in the leading statesoffer spending information that is bothbroad and detailed. In contrast to Trans-

parency 1.0 stateswhich may offer onlypartial information about governmentcontracts onlineleading Transparency2.0 states provide user-friendly searchesof a comprehensive range of current andhistorical government expenditures, in-cluding detailed information about gov-ernment contracts with private entities,subsidies, spending through the tax code,and transactions by quasi-public agencies.

Contracts with private companies:

Many government agencies spendwell over half their budgets on out-side contractors.9 These contractorsare generally subject to fewer publicaccountability rules, such as sunshinelaws, civil service reporting require-ments, and freedom of information

Transparency 2.0 Websites EmpowerCitizens to Track Government Spending

Transparency 2.0 Websites Empower Citizens 9


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laws. To monitor spending on con-tractors, it is important that statesprovide comprehensive online trans-parency and accountability for allcontract spending.

Subsidies: State and local govern-ments allocate $50 billion in subsidieseach year, yet most governments stilldont disclose full information aboutthese expenditures.10 Unmeasured,the performance of these subsidiesremains unmanaged and unaccount-able. Subsidies take the form of grants,economic development incentives,and other spending through the taxcode. Economic development incen-tives are subsidies given to companies,often in the form of tax credits, withthe intention to create jobs and spurgrowth. Subsidies through the taxcodeotherwise known as tax ex-pendituresappear in many forms,including special tax breaks, credits,and preferences. Tax expenditureshave the same bottom-line effect onstate budgets as direct state spend-ing, since they must be offset by cutsto other programs or by raising other

taxes. Once created, tax expendituresoften escape oversight because they donot appear as state budget line itemsand rarely require legislative approvalto renew. For these reasons, spendingthrough the tax code is in particularneed of disclosure. Leading states pro-vide transparency and accountabilityfor tax expenditures, usually by link-ing their transparency portal to a taxexpenditure report, which is a detailedlist of the states tax credits, deductions

and exemptions. Leading states list thecompanies or organizations that re-ceive subsidies and explain what com-panies delivered for these subsidies.

Quasi-public agencies: In recentyears, quasi-public agencies have

been delivering a growing shareof public functions.11 Quasi-publicagencies are independent governmentcorporations that are created throughenabling legislation to perform a par-ticular service or a set of public func-

tions. They operate on the federal,state, and local levels, providing ser-vices such as waste management, tollroads, water treatment, communitydevelopment programs, and pensionmanagement. Quasi-public agencieshave extraordinary control over theirbudgets and do not rely solely, oroften even significantly, on an annualappropriation from the legislature.Their expenditures therefore fall out-side the official state budget, so thepublic can only occasionally reviewtheir expenditures. A recent Massa-chusetts study, for instance, identified42 such off-budget agencies in thestate with annual revenues equal toroughly a third of the entire officialstate budget. 12 Leading states shedlight on quasi-public agency expen-ditures by posting contracts enteredinto by quasis and giving detailedinformation on their spending.

One-StopTransparency websites in leading states of-fer a single, central website where citizenscan search all government expenditures.With one-stop transparency, residents aswell as local and state officials in thesestates can access comprehensive informa-tion on direct spending, contracts, tax ex-penditures, and other subsidies in a singlelocation.

One-stop transparency is important forpublic oversight of subsidies. Subsidiescome in a dizzying variation of formsin-cluding direct cash transfers, loans, equityinvestments, contributions of property orinfrastructure, reductions or deferrals oftaxes or fees, guarantees of loans or leases,



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and preferential use of government facili-tiesand are administered by a variety ofgovernment agencies.

Placing all data about governmentsubsidies on a single website can uncover

waste and highlight opportunities for sav-ings. For example, when Minnesota beganto require agencies to submit reports onthe performance of subsidized projects,the reports revealed that numerous proj-ects were receiving assistance from twoor more funding sourcesthat is, Min-nesota taxpayers were sometimes double-and triple-paying for the creation of the

same jobs. After the centralized publica-tion of those reports, the double-dippingstopped.13

One-Click Searchable and

DownloadableTransparent information is only as usefulas it is easily accessible, which means eas-ily searchable. Transparency websites inthe leading states offer a range of searchand sort functions that allow residents tonavigate complex expenditure data with asingle click of the mouse. In Transparency1.0 states, residents who dont already

Transparency 1.0

Incomplete: Residents have access to

only limited information about public

expenditures. Information about

contracts, subsidies, or tax expenditures

is not disclosed online and often not

collected at all.

Scattered: Determined residents who

visit numerous agency websites or make

public record requests may be able to

gather information on government

expenditures, including contracts,

subsidies, and special tax breaks.

Tool for Informed Insiders: Researchers

who know what they are looking for

and already understand the structure ofgovernment programs can dig through

reports for data buried beneath layers

of subcategories and jurisdictions.

Transparency 2.0

Comprehensive: A user-friendly Web

portal provides residents the ability

to search detailed information about

government contracts, spending,

subsidies, and tax expenditures for all

government entities.

One-Stop: Residents can search all

government expenditures on a single

website.

One-Click Searchable: Residents can

search data with a single query or browse

common-sense categories. Residents cansort data on government spending by

recipient, amount, legislative district,

granting agency, purpose, or keyword.

Residents can also download data to

conduct detailed off-line analyses.

Transparency 2.0 Is Comprehensive, One-Stop,One-Click Budget Accountability and Accessibility



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know what they are searching for or whereto look will tend to get stymied by inscru-table layers of subcategories, jurisdictions,and data that cant be readily compared.Transparency 2.0 states, by contrast, allowresidents to browse information by recipi-

ent or category, and to make directed key-word and field searches.

Citizens who want to dig deeper intogovernment spending typically need todownload and analyze the data in a spread-sheet or other form. Downloading data-sets can also give residents the ability toaggregate expendituresfor a particularcompany, agency or date, for instancetosee patterns or understand total spendingamounts that might otherwise be lost in asea of unrelated data.

Transparency 2.0 MakesGovernment More Effectiveand AccountableStates with good transparency websiteshave found that these sites result in a wide

variety of benefits for state residents andthe government. Transparency websiteshave helped governments find ways to savemoney and meet other public policy goals.

Transparency websites save money. Trans-parency 2.0 states tend to realize signifi-cant financial returns on their investment.The savings come from sources big andsmallmore efficient government admin-istration, fewer information requests forstaff, and more competitive bidding for

public projects, to name just a fewandcan add up to millions of dollars. The big-gest savings may be the hardest to measure:the abuse or waste that doesnt happenbecause government officials, contractorsand subsidy recipients know the public islooking over their shoulder.

Transparency websites often help statesrealize significant benefits by identifyingand eliminating inefficient spending. InTexas, the Comptroller was able to utilizethe transparency website in its first twoyears to save $4.8 million.14 Once South

Dakotas new transparency website waslaunched, an emboldened reporter re-quested additional information on subsi-dies that led legislators to save about $19million per year by eliminating redundanciesin their economic development program.15

Transparency websites save states moneyby enabling them to renegotiate contracts.Aggregating and posting the informationonline helps identify opportunities to cutcosts. For example, using its transparency

website, Texas was able to renegotiate itscopier machine lease to save $33 millionover three years. The state was also ableto negotiate prison food contracts to save$15.2 million.16

Transparency websites also save mil-lions by reducing the number of costly in-formation requests from residents, watch-dog groups, government bodies, and com-panies:

Massachusetts procurement web-site has saved the state $3 million byeliminating paper, postage, and print-ing costs associated with informationrequests by state agencies and paper-work from vendors. Massachusetts hassaved money by reducing staff time forpublic record management, retention,provision, archiving, and documentdestruction.17

The Utah State Office of Education

and the Utah Tax Commission saveabout $15,000 a year from reducedinformation requests. These are onlytwo of the more than 300 govern-ment agencies in the state, suggestingthat Utahs total savings are likely fargreater.18



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Table 2: Cost to Create a Transparency Website24

Entity Website Cost

United States of America Less than $1 million

Alaska $15,000-$25,000 from existing budget

California $21,000

Florida Existing budget

Kansas $100,000 from existing budget

Kentucky Funds from existing budget to develop,

$150,000 additional budgeted to implement

Louisiana $1,000,000

Maryland Less than $100,000

Missouri $293,140 from existing budget

Nebraska $38,000

Nevada $78,000

Oklahoma $8,000 plus existing staff time

Oregon Existing budget

Pennsylvania $456,850

Rhode Island Existing budget

South Carolina $310,000, from existing budget

Texas $310,000

Utah $192,800, plus existing staff time

Washington $300,000

According to RJ Shealy, Spokespersonfor the South Carolina Comptrol-ler Generals Office, South Carolinahas seen one-third as many open re-cords requests as they had prior to thecreation of its transparency website,

significantly reducing staff time andsaving an estimated tens of thousandsof dollars.

It is estimated that Kentuckys websitewill eliminate 40 percent of the ad-ministrative costs of procurement as-sistance requests, and could reduce thecosts associated with Open Recordsrequests by as much as 10 percent.19

Transparency websites also save statesmoney by increasing the number of com-peting bidders for public projects. In 2009,Texas reported receiving lower bids forcontracts after making contracting infor-mation available to the public.20

Online transparency offers increased sup-port for a range of other public policy goals,including promotion of community investmentand affirmative action goals. Governmentsoften stumble when trying to meet com-munity investment and affirmative actiongoals because managers struggle to bench-mark agencies, spread best practices, oridentify contractors who advance these



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goals. Online transparency portals allowstates to better measure and manage theprogress of such programs. For example,transparency websites allow agencies toidentify minority- or woman-owned com-panies that have done business with other

agencies across the state.

Online transparency costs little. Thebenefits of transparency websites havecome with a surprisingly low price tag.The federal transparency websitewhichallows Americans to search through federal

spending totaling more than $2 trillion ayearcost less than $1 million to create.Missouris websitewhich is updateddaily and allows its residents to searchthrough state spending totaling over $20billion a yearwas mandated by executive

order and was created entirely withexisting staff and revenues.21 Nebraska hasspent $38,000 for the first two phases ofits website.22 Oklahomas Office of StateFinance created its transparency websitewith $40,000 from its existing budget.23(See Table 2.)



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In 2010 many states took important stepstoward improved spending transparen-cy. Several joined the growing ranks of

Transparency 2.0 states by launching new

websites with checkbook-level detail onstate spending. Others upgraded their ex-isting websites to provide more informa-tion and be easier to use. And a few havegone beyond Transparency 2.0 by devel-oping and implementing new online toolsfor citizen empowerment.

Six States Launched NewTransparency Websites in2010In 2010, six statesArizona, Indiana,Massachusetts, Michigan, New Hamp-shire and Wisconsincreated new trans-parency websites. Arizona and Indiana

launched checkbook-level, user-friendly,comprehensive sites, while Michigan andWisconsin launched sites that providecheckbook-level detail, but still have much

room for improvement. Massachusettslaunched a fairly comprehensive website,but it is only partially complete, and NewHampshire launched a website that lacksmost features of Transparency 2.0.

ArizonaIn 2010, Arizonas Department of Ad-ministration created a new transparencywebsite called OpenBooks. Before Open-Books launch, residents had to rely on awebsite called AZCheckbook, a Transpar-

ency 1.0 portal. Launched by former StateTreasurer Dean Martin without an execu-tive order or statute mandating its launch,AZCheckbook offers an array of brightly-colored pie charts and pop-up line graphs,but simply lists aggregate spending num-bers for various government departments

States Continued Progress Toward

Transparency 2.0 in 2010



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and agencies. In comparison, the new web-site, OpenBooks, boosts Arizonas govern-mental transparency by displaying spe-cific recipients of government spending.It is the official state transparency website,mandated by 2008 legislation, and is op-

erated by the Arizona Department of Ad-ministration. OpenBooks allows residentsto monitor most state expenditures at thecheckbook level.

The Arizona Department of Adminis-tration designed the website to be acces-sible both to researchers who know whatthey are looking for and to non-technicalcitizens visiting the site for the first time.For example, researchers can locate spe-cific payments using a twenty-two digitnumber called an Entity Transaction ID.Ordinary citizens can also browse stateagency spending by contractor or activity.Visitors can also use the website to dis-cover how much money the state pays outin tax exemptions, grants, and economicdevelopment incentives.

The state can still do more to shinelight on its expenditures. While the web-site tracks subsidies in the form of grants

and tax creditsand in some cases showsthe number of jobs and investments thatcompanies are expected to delivermanysubsidy programs lack this detail and noinformation is provided on the amount oftax credits given to individual companies.25

In 2011, the Department of Administra-tion should upgrade the website to includeinformation on past expenditures and in-formation on local and county spendingand budgets.

IndianaIndianas transparency portal is new, com-prehensive, and easy to use. The website,launched in August 2010, shows that with acoordinated effort among various govern-ment agencies (in Indianas case betweenthe Auditors office, the Office of Manage-ment and Budget, the Office of Technol-ogy, the Department of Administration,the Department of Local GovernmentFinance, and others), a state can developa Transparency 2.0 website that is highquality from the moment it launches.26

The transparency portal is linked to theState Contract Portal, which providescheckbook-level information on payments

Lack of Full Reporting on Indianas EconomicDevelopment Incentives Leads to Apparent Misreportingof Job-Creation Numbers

Publicly posting fine-grained spending information has the added benefit of pro-viding a reality check on official characterizations about program performance. InIndiana the transparency website posts the hoped-for results of the states economicdevelopment incentives without posting the actual results. Official characterizationsof the success of the states economic development programs were challenged by a

much-reported audit of the Indiana Economic Development Corporation (IEDC).The study examined 597 job-creation projects and revealed that only 38 percent ofthe jobs announced by IEDC were actually created.27 The reason: many of the pro-grams sponsored by IEDC either underperformed or never began in the first place.These problems could have been identified earlier if Indiana had posted the numberof jobs actually created through economic development programs.



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to specific vendors. In addition to allow-ing visitors to search for expenditures bythe vendor or specific project, visitorscan customize their search to look for ex-penses incurred over a particular periodof time, in a specific geographic area, by aparticular government agency, or of a cer-tain amount. Once visitors have located acontract they are interested in, the portalallows them to open a PDF copy of thecontract.

The State Contract Portal also allowsvisitors to search by the type of contractsuch as license, grant, attorney fee, or pro-curement contract. This is a user-friendlyfeature unique to Indianas transparency

portal. The avenues through which thegovernment distributes funds are oftenconvoluted and difficult for the averagecitizen to follow. This new feature empow-ers citizens to easily distinguish among avariety of government expenditures.

The transparency website also pro-vides many tools and links that allowresidents to monitor Indianas revenue,expenditures, and government perfor-mance. The portal provides a list of cur-

rent Quantity Purchases Agreements,which are the prices under which vendorsagree to supply goods and services toIndianas state agencies on an on-going,as-needed basis. Residents can also usethe transparency portal to browse for in-formation on revenue and how IndianasAmerican Recovery and ReinvestmentAct (ARRA) funds are distributed. Thewebsite provides information on gov-ernment employees, so that interestedresidents can see how many government

employees are in certain departmentsand how much they are being paid. Web-site users can also click on links to readfinancial reports, look up information onlocal government budgets, and track thegovernment of Indianas performancebased on tangible results.

MassachusettsMassachusetts launched a new budgettransparency website in the past year calledMassachusetts Transparency. The admin-istration has improved it steadily, but stillhas a long way to go.

Massachusetts Fiscal Year 2011 StateBudget calls for the development of a com-prehensive state budget and spending web-site coupled with improved transparencyof transferable and refundable business taxcredits. It also marks the first explicit man-date in the U.S. for inclusion of quasi-publicagencies spending and revenue information.

The new features will eventually make

Massachusetts site one of the nations mostcomprehensive transparency websites.

The tax expenditure budget linked atthe Massachusetts transparency site sets astrong standard for presenting tax expen-ditures. The report includes all tax expen-ditures, along with the cost and descriptionof each program, and includes historicalinformation. The website includes a linkto the easy-to-use American Recovery andReinvestment Act (ARRA) website, which

includes all ARRA spending and completecontracts for that spending. In addition,the Massachusetts website solicits feed-back and provides instruction for the pub-lic on how to use and find information.

However, the information on detailedspending currently includes only datalinked through the states Comm-PASSprocurement website, which does not in-clude all contracts with vendors. This isa temporary condition until the informa-

tion is made more comprehensive and getshoused in the main transparency website,as mandated by the new law. The site needsto meet its mandate by including the taxcredit incentives and quasi-public agencyspending. It should also be organized in amore user-friendly manner for the public.



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MichiganMichigans new transparency website em-braces many aspects of Transparency 2.0,but falls short in important ways.

On the plus side, Michigans site gives

users information on payments to contrac-tors, along with details on tax expendituresand limited information on the amount offunds spent by different government agen-cies. The site also includes user-friendlyinteractive applications that allow usersto see where different state departmentsspend their money. Every department hasa bar graph and pie chart breaking downits expenditures, and each segment of thepie chart can be broken down an addition-al layer to reveal greater detail.

However, Michigans site falls short byrequiring citizens who want to view an ac-tual copy of the contract to cross referencebetween disconnected documents on thesite.28 In addition, the charting functionuses vague category descriptions and failsto enable the user to drill down to see spe-cific expenditures. For example, users canlearn that the state paid $306 million tocompanies for transportation projects, but

cannot find out which rail lines or high-ways were built or repaired.29

New HampshireNew Hampshires transparency websiteis a brand new addition to the online net-work of state transparency portals, but itlacks most features of Transparency 2.0.Launched in December 2010, the portalis designed to provide visitors with infor-mation on the states budget, revenue, andexpenses, but the information is limited

and its expenses are not checkbook-level.Nowhere in the website, for example, canvisitors find the government spending onspecific transactions or vendors.

WisconsinWisconsins new transparency website,created in fall 2010, was improved near theyears end and now embraces the compre-hensiveness of Transparency 2.0. Wiscon-sin has been improving its website over the

course of several years, and now providescheckbook-level detail about state spend-ing.30 Visitors can now find informationon the payments made to specific vendorsthrough several easy-to-use search tools.(see Figure 3.)

The transparency website has a separate,new portal for contracts called ContractSunshine (beta). Visitors can easily findinformation on specific payments made toindividual vendors. In the contract portal,the search functions are intuitive and easy-to-use, and visitors can find informationon payments made to vendors for specificservices in certain years. The main trans-parency portal also allows users to learnabout past contracts and grants, and linksto websites that reveal campaign financeinformation and lobbying reportsexcel-lent innovations that could someday becross-referenced on a company-by-com-pany basis.

The website still has much to improveupon. Although the contract portal iscomprehensive and user-friendly, themain transparency portal remains difficultto navigate and archaic.31 The site still liststhe improvements planned for years 2006and 2007, and one button confusingly en-courages users to submit purchasing linkor information, and then links to an e-mail address. Various other links do notwork at allvisitors are unable to see web-

sites like the Government AccountabilityBoards Eye on Financial Relationshipspage, which tracks the relationship be-tween elected officials and companies.



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Several States Improvedtheir Existing WebsitesSeveral states have made significant im-

provements to their sites, allowing resi-dents to better view how their state gov-ernment manages the public purse. Evenstates with leading transparency websiteslast yearsuch as Kentucky and Texascontinued to make improvements thathave resulted in their sites being amongthe nations best. The recent improve-ments made by Georgia, Louisiana, Mary-land, Nevada, New Jersey, Oregon, SouthDakota, and Utahdiscussed belowareindicative of the many improvements

states have made to transparency websitessince the beginning of 2010.

GeorgiaGeorgia added a tool to its transparencysite that allows residents to search ex-penditures by the type of good or service

purchased. This is an important aspect ofTransparency 2.0 because it shines a lighton where citizens tax dollars are going.

LouisianaLouisiana has gone from a state lackingin many features of Transparency 2.0 toa leader in the movement. Website visi-tors can now view information on expen-ditures not included in the official budgetthat would typically remain hidden fromthe public eye. For example, visitors candiscover the amount of tax expendituresgiven to tobacco companies, beer compa-nies, gas companies, and others. Visitorscan also track government spending going

back several years.

Louisiana has also made its websiteeasier to use. Upon entering the site, visi-tors are presented with an easy-to-navigatetemplate with nine separate buttons linkingthem to various functions. (See Figure 4.)

Figure 3: Wisconsins Search Tools with Who is Selling? Selected

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MarylandSince last year, Maryland added a feature

allowing visitors to view all the grantsawarded to companies and groups. Beforethis section was available, citizens had tosift through the Department of Budget andManagements website to find informa-tion on economic development incentives.Now, Marylands new Grants sectionprovides visitors with detailed descriptionsof each economic development incentive.This adds a high level of transparency tohow taxpayers dollars are spent.

NevadaIn the past year, Nevada upgraded itstransparency website so that visitors canfind contracts dating back to 2006. (SeeFigure 5.) For Nevada, this is importantprogress toward Transparency 2.0 because

in order to hold contractors and state bu-reaus completely accountable, residentsmust be able to view the historical finan-cial relationships between companies andthe state. By posting transactions that dateback to 2006, the state enabled residentsto track trends in state spending and con-tract awards over time.

New JerseyIn the past year, New Jersey upgraded itstransparency website so that it is now check-book-level, allowing visitors to track the

payments made to individual vendors. (SeeFigure 6.) Last year, the transparency portalonly provided visitors with limited informa-tion such as aggregate spending numbers fordepartments and agencies. Visitors can nowtrack specific amounts paid to general con-tractors, subcontractors, consultants, and

Figure 4: Louisianas Easy-To-Navigate Template

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Figure 5: Nevadas Site Now Allows Users Find Contracts Dating Back to 2006.

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many other business entities, all the way backto 2004. New Jersey has also joined severalother leaders in transparency by providingvisitors with a link to its tax expenditure re-port, which did not exist before 2009.

OregonOregons transparency website was improveddramatically by embedding data-viewing toolscreated for Oregons data.oregon.gov project.With these new tools, website users no lon-ger need to download the entire spreadsheetof all state agency spending to perform analy-sis. The tools allow users to search the data,download their search results, and createmaps and charts from the data. The websitewas also upgraded in 2010 by providing users

with contact information for members of theTransparency Oregon Advisory Commissionand audio archives of commission meetings.

Oregon continues to have room for im-provement in providing a full picture ofthe states spending. The website has yet toinclude checkbook-level spending by localgovernments or quasi-public agencies inthe state. Legislation has been proposed inthe 2011 session to include details of re-cipients and results of economic develop-ment tax expenditures on the transparency

site. In addition, the website still does notinclude full details of state contracts.

South DakotaIn the past year South Dakota upgraded itstransparency website so that it now providescheckbook-level detail, allowing visitors totrack the payments made to individual ven-dors. Previously, the scope of the transpar-ency portal was limited, as it only allowedusers to view the aggregate spending numbersfor departments and agencies. South Dako-ta also now posts copies of all contracts forsupplies, services, and professional servicesreceived by the state.

Utah

In the past year, Utah upgraded its trans-parency site to provide citizens with awealth of information on governmentspending. By using the transparency site,citizens can now read up on the paymentsmade to vendors and view copies of somecontracts. They can learn the good or ser-vice purchased, which government agencyfunded the project, and many other use-ful pieces of information that help citizenstrack Utahs spending.



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In the past year, states across the na-tion have made significant progress inreporting and accountability in govern-

ment spending. From Arizona to New

Jersey, states have improved their trans-parency websites to allow citizens to viewcheckbook-level data on government ex-penditures quickly and easily.

In order to assess states progress to-ward the standards of Transparency 2.0,each states transparency website was an-alyzed and assigned a grade based on itssearchability and breadth of informationprovided. (See Appendix A for the com-plete scorecard and Appendix B for an ex-

planation of the methodology.) An initialinventory of each states website was thensent to the administrative offices believedto be responsible for operating each stateswebsite. Officials from 39 states respond-ed, clarifying information about their web-sites. In some cases, the researchers used

the state comments to adjust and fine-tunestates grades.

Based on the grades assigned to each

website, states can be broken into three cat-egories: leading states, emerging states, andlagging states. (See Table 3 and Figure 7.)

As was the case last year, spendingtransparency does not reflect differencesbetween Red states and Blue states.The average score for a Democratic-lean-ing state (determined by Presidential votein 2008) was 61.3 while that of a Republi-can-leaning state was 61.0, a difference ofless than half a single point. Furthermore,

of the nine states leading the way in trans-parency efforts nationwide, five were wonby President Obama in the 2008 electionand four were won by Senator McCain.Similarly, among the nine states consid-ered lagging states because of the failinggrade that they received, five were won by

Making the Grade: Scoring State-Level

Progress Toward Transparency 2.0

Making the Grade 23


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Category Grade States

Leading States A Kentucky, Texas

A- Arizona, Indiana, Louisiana

B+ Massachusetts

B North Carolina

B- Ohio, Oregon

Emerging States C+ Missouri, New Jersey, Pennsylvania, Virginia

C Alabama, Colorado, Georgia, Hawaii, Illinois, Kansas,Maryland, Michigan, Minnesota, Mississippi, Nebraska,Nevada, New York, Utah

C- Oklahoma, Rhode Island

D+ California, Delaware, New Mexico, South Carolina,South Dakota, Wisconsin

D Florida, VermontD- Alaska, Tennessee, Wyoming

Lagging States F Arkansas, Connecticut, Idaho, Iowa, Maine, Montana,New Hampshire, North Dakota, Washington,West Virginia

Table 3: Leading, Emerging, and Lagging States

Figure 7: How the 50 States Rate in Providing Online Access to Government

Spending Data



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Changes to the Grading Criteria from 2010

Reflecting rising standards for government transparency, the grading criteria changedslightly from the 2010 Following the Money report, resulting in changes in grades forsome websites whose content has not changed since 2010.32 For example, Illinois scorefell significantly due to more rigorous scoring criteria and no significant improvementson the states transparency website. By improving its online transparency reporting,Kentucky remained a top-scoring state; but the more stringent criteria nonetheless ledto a one-point reduction in its score. Changes in the criteria were:

Two new grading criteria were added, one for enabling users to download dataon payments made to vendors, and another for providing tools inviting visitorsto give feedback on the website and its content.

In order to provide more fine-tuned grading, state websites were credited forproviding descriptions about specific payments. This is a departure from last

year, when sites were not awarded any points for having such brief descriptions.Recognizing gradual steps toward Transparency 2.0 practices, states were givenmore points for providing more complete information.

States were awarded points for providing information on tax expenditures only iftheir transparency website was linked to their tax expenditure report. Tax expen-diture reports, now provided by at least 42 states, have become the new standardfor measuring funds spent on tax exemptions and preferences.33 Tax expendituretransparency was graded on a graduated scale that reflects differences in thecomprehensiveness and detail of that reporting.

Because of heightened standards, states were awarded fewer points for merelyproviding the dollar amounts of grants and individual economic developmentsubsidies without also providing information about their intended benefits andthe delivered results.

Along with the new grading criteria, this years report also differs from last yearsin that it evaluates a broaderbut more precisely defineduniverse of websites thatprovide government financial information to the public. In most states there is a clearlydesignated central transparency site, which we used for evaluation by default. For stateswithout a transparency website, we based scoring on the states procurement website.Thus, the procurement websites belonging to Arkansas, Connecticut, Hawaii, Iowa,Maine, Montana, North Dakota, Pennsylvania, and West Virginia were evaluated inthis years report card.34 Procurement sites typically provide some publicly availablecontracting information, even if they are designed primarily to solicit bids from vendorsrather than to provide information to the public. Intrepid citizens can sometimes findcheckbook-level detail on these sites. Procurement sites tended not to be user-friendly,and that is reflected in the scoring. In the case of Vermont, public officials directed us toa separate Department of Finance and Management website as the portal with the mosttransparency features. That site was the basis for Vermonts scoring.

Making the Grade 25


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President Obama in the 2008 election andfour were won by Senator McCain.

The following sections summarize com-mon traits shared by the states in each ofthese categories to highlight their strengths

and weaknesses.

Leading StatesNine states have set the standard forspending transparency by establishinguser-friendly portals that contain compre-hensive information on government ex-penditures. Citizens and watchdog groupscan use the sites to monitor governmentspending quickly and easily. All of the sitesare searchable by the vendors name andtype of service purchased, most of the sitesprovide comprehensive information ongrants and economic development incen-tives, and more than half of these sites pro-vide complete copies of vendor contracts.

Over the past year, four statesArizo-na, Indiana, Louisiana, and Texashave

created or improved their websites to nowearn As. These states, along with Ken-tucky, whose transparency website toppedour ratings in 2010, are true leaders in theTransparency 2.0 movement. Arizona andIndiana launched brand-new comprehen-sive websites. Louisiana made major im-provements to its old site by adding de-tails about past contracts, a link to its taxexpenditure report, and information abouteconomic development incentives. Texasmade a few significant changes, such as

allowing visitors to view actual copies ofcontracts made with vendors.

Among the most distinctive features ofthe leading transparency websites are thebreadth and level of detail of the informa-tion they contain. For example, five of the

statesTexas, Kentucky, Indiana, Arizona,and Ohioprovide copies of vendor con-tracts in their entirety, and the rest pro-vide some degree of information about thegoods or services received by the state inparticular transactions.

Another feature of these sites is theirease of use. Each of the sites providestools that allow users to make targetedsearches and to sort the data. For example,Indianas site allows visitors to specify thetypes of payments made to vendors (e.g.Grant, Lease, Professional/PersonalServices, Contracts or procured ser-vice) in addition to the typical search boxfor keywords. Louisianas site has separatesearch sections for contracts, grants, andeconomic incentives.

Even though these states have the bestTransparency 2.0 practices, they still haveroom for improvement. One-third of theleading state sites do not allow users todownload datasets of information withvendor-specific information, making itdifficult for citizens to uncover total gov-ernment expenditures received by certaincompanies or government spending over

a certain period of time. Also, only four ofthese leading statesIndiana, Massachu-setts, North Carolina, and Texasprovidefinancial information on local governments.

Emerging StatesThe websites of emerging states providecheckbook-level detail on government

expenditures, but they are less searchableand lack the breadth and depth of infor-mation that characterizes the sites of lead-ing states. Only four of the 31 emergingstates, for example, provide copies of allvendor contracts. Only six states providelinks to their tax expenditure reports,



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making it difficult for residents to usetheir states transparency portal to track allforms of government spending.

The states in the C range, however,are well on their way to making their web-sites easy to use. Out of the 20 C state

websites, 17 are searchable by both vendorname and type of activity and 16 providea direct link from their site to their stateswebpage on American Recovery and Re-investment Act funds.

Many states that garnered failing scores

last year made recent improvements totheir sites or launched new ones to earnCs or Ds. Last year, New Jerseysand South Dakotas transparency portalsprovided only aggregate spending num-bers for departments and agencies. Overthe past year, New Jersey and South Da-

kota upgraded their websites to C+ andD+ quality, respectively, and now userscan view payments made to specific ven-dors. Michigan and Wisconsin, which didnot have transparency websites last year,recently created their websites, and nowearn a C and D+, respectively.

Score in Score inFollowing Following Improvementthe Money the Money in Annual

State 2011 2010 Score

Arizona 92 12 80

New Jersey 78 25 53

South Dakota 63 25 38

Louisiana 92 67 25

Oregon 82 59 23

Georgia 74 52 22

Nebraska 71 56 15

Texas 96 82 14

North Carolina 85 74 11

California 62 53 9

Note: States included in the table do not include states that were scored this year basedon their procurement website because these websites were treated differently in theprevious report.

Table 4: Top 10 Biggest Improvements in TransparencyWebsites From 2010 to 2011

Several states dramatically improved their online budget transparency in the pastyear. The states with the largest gains made major improvments to their existingtransparency portals. Out of all states with wesites last year, these are states thatmade the largest improvements:

Making the Grade 27


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Lagging StatesFinally, ten states lag behind the transpar-ency movement and have only taken smallsteps toward improving government ac-countability. In the past year, the states in

this category have not established trans-parency websites, have not made theirprocurement sites accessible to the public,or have maintained sites that do not in-clude checkbook-level detail on govern-ment expenditures.

Most lagging states have launchedtransparency or procurement websites thatprovide either limited or superficial infor-mation about government expenditures.On New Hampshires site, visitors canview aggregate expenditures for govern-ment functions (such as transportation)and the salaries of state employees, but notindividual payments to vendors. Arkansas,

Montana, and other lagging states, pro-vide visitors access to term contracts orpurchasing orders, which establish a setprice at which the government can buy aspecific good or service. Visitors cannotfind out how much money the govern-

ment has paid to a specific vendor or whatservices were contracted. For example, aterm contract or purchase order will givethe cost of a box of photocopy paper, butnot how many boxes the state purchased.

Maines website is the only procure-ment or transparency website that is notaccessible to the public. Since visitorsmust be registered as vendors to access thewebsite, citizens and government officialscannot use the site as a tool in monitoringgovernment spending. Maines site was notconsidered eligible for scoring in the anal-ysis because it is not open to the generalpublic.



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Many states go above and beyondsimply providing checkbook-level information on government

spending. They have developed new tools

and posted new sets of information ongovernment expenditures, giving residentsunprecedented ability to monitor howtheir government allocates resources.

Innovative States HaveDeveloped Best Practices forProviding Vendor-SpecificPayment InformationMore and more transparency websites areadopting easy-to-use tools for tracking pay-ments made to vendors. In the past, userswould be stymied by archaic search meth-ods and limited information on vendors

and payments. But as more and more web-sites make the shift to Transparency 2.0,they are adding search and sort tools thatmake their sites easier to navigate.

On North Carolinas site, in addition tobeing able to search by vendor name andkeyword, users can also search by the ven-dors location, allowing citizens to see howgovernment spending is being distributedgeographically. On Alabamas site, userscan search by the month the payment wasawarded.

One user-friendly way to search for apayment is by typing the vendors name

into a search box. More and more statesare adding search boxes to their transpar-ency websites. New Jersey enables users totype in the name or part of the name ofany contractor, subcontractor, consultant,person, firm, corporation, or organizationreceiving a payment from the state. The

Many States Have Improved their

Websites Beyond BasicTransparency 2.0 Standards

States Have Improved their Websites Beyond Transparency 2.0 29


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site will display the amount paid to anyvendors who match the query. This ishelpful because users may not know ex-actly what they are looking for or the ex-act name of a contractor. In this respect,websites like New Jerseys are much bet-

ter than websites such as Colorados, inwhich users must search for vendors byselecting the first and second characterof the vendors name from scroll downmenus.

Some transparency portals have addedtools to allow users to easily differentiategrants from vendor contracts. Most websitesaccomplish this by adding a separate searchfunction for grants. In the past, users wouldhave to find the details for a specific pay-ment (through a vendor search) to figure outwhether each payment was actually a grant.For example, on Rhode Islands site users canonly learn that the payment is a grant from

the description box once a search has beenqueried. Visitors to Marylands transparencywebsite now have the option of searchingfor payments or grants from the portalsmain page, and visitors to New Yorks sitecan search for a specific kind of contract

such as for commodities, equipment, grants,etc. (See Figures 8A and 8B.)

Innovative States HaveCreated New Datasets andToolsMany states have developed new tools andposted new datasets for their transparencywebsites. For instance:

State loans: Some states provide userswith information on loans the state has

Figure 8A: Marylands Payments Portal



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given out. On Marylands site, for ex-ample, visitors can learn which gov-ernment departments gave certainkinds of loans to specific companies.

State revenue: Some states pro-

vide information on state revenue.At a basic level, Indiana, for in-stance, allows visitors to learn howmuch revenue comes from differenttaxessales tax, individual incometax, corporate income tax, etc. Otherstates have gone further by provid-ing visitors with a wealth of ways todigest revenue information. NewJerseys site, for example, allows visi-tors to uncover how specific agenciesreceive their revenue. Visitors can,for instance, learn that the Envi-ronmental Protection Agency hascollected $8,013.66 through the LakeRestoration Fund.

Bonded indebtedness: Some stateshave taken the beneficial step of post-ing information on the debt the statehas accrued by selling bonds. A por-tion of Virginias website is dedicatedto specific bonds sold by the state.

Users can see the amount of the bonds,the interest owed, and how far alongthe state is to paying off its debt. (SeeFigure 9.) This feature would be espe-cially valuable if applied also to a statesquasi-public agencies, which oftenissue large quantities of technicallyoff-budget debt paid for by fees.

State property: Some states post in-formation on government-owned land.This boosts government accountabilitybecause it allows residents to bettertally their governments assets. It alsoallows officials and residents to figureout which parcels of government-owned

Figure 8B: Marylands Grants Portal



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Figure 9: Virginias Website on Bonded Indebtedness

Kentucky: Pushing the Transparency Frontier

For the second year in a row, Kentucky has been at the leading edge of Transpar-ency 2.0. Last year, Kentuckys website was the most comprehensive and user-friendly, displaying a plethora of easily-digestible information. In last years report,Kentucky was the only state to receive an A, and was 11 points ahead of the 2010runner-up, Ohio.

Over the past year, Kentucky has taken strides to remain at the head of the pack.The website now posts a database of government-owned land parcels, customiz-

able GIS maps for demographic data, and salary information for every govern-ment employee. Kentucky has also reconfigured some aspects of its site to makeimportant sets of information more accessible. For example, Kentucky made itstax expenditure reports more prominent, allowing users to more easily uncoverthe amount of government funds lost to credits, exemptions, and other spendingthrough the tax code.

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land are unused, so they can then beturned into social assets such as parksor community centers. Kentuckyswebsite lists the address and purpose ofgovernment-owned parcels of land, butcan be improved by listing their acre-

age. Ohios website lists the acreageof its parcels, but it can be improvedby listing all addresses and providingexplanations of their use (many parcelsmerely list as their usage: State ofOhio).

State employee compensation: Somestates, such as Illinois and Tennessee,allow users to search for a state em-ployees salary by his or her name, jobtitle, or department. Tennessee is atthe leading edge of this feature becauseits site allows users to uncover the top-compensated employees in particulardepartments or agencies.

Glossary of terms: Some states striveto make their sites more accessible tothe general public by providing a glos-sary of terms that allows users to navi-gate the often complex terminology ofpublic finance. Virginia, Rhode Island,

Utah, and Texas all post glossaries ontheir sites, while Rhode Island providesusers with a comprehensive UsersManual for operating its site.

Surveys: Some states have takencitizens involvement in their transpar-ency websites to a new level by askingvisitors to fill out a survey of theirsite. While most states ask for feed-back with a request (for example, Wewelcome your feedback) or a button, afew states such as Texas and Minnesotaask for feedback with a user-friendlysurvey. (See Figure 10.) Surveys en-courage users to provide feedback and

Figure 10: Texas Transparency Websites Survey

!"#$%&'()&(*+,-./0+#&12&+,&3*,56#0(,37#56(&'+*6#5//%(#)0+,37#56,(#8,(,59

:"#;25,/3'%9#$%&'(+/8,)'#(6/+5#)&(*+,25,/3#/


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allow states to specify the kind of feed-back they want toward making specificchanges to their website.

Watchdog-friendly applications:Some forward-looking states invite

watchdog groups and other citizensto report on abuses of power andwaste. Linked to its transparency site,Californias new Waste Watchers web-site asks for citizens to report placesthey see improper spending. Since itslaunch in 2010, suggestions made bycitizens on Waste Watchers have savedthe state $28 million.35 Once the statecorrects its spending, Waste Watch-ers will post detailed and easy-to-un-derstand explanations of the savings.For example, under the Departmentof Toxic Substances Control: Afterreceiving a Waste Watchers complaintthat state-issued cell phones were being

underutilized, the service plans for190 mobile phones were terminated.Estimated savings is $7,670.00 permonth.36

Size of government: Washington

allows residents to learn the ways theirgovernment has grown or contractedover time. The website presentsprogram and agency spending totalsdating back to 1999, so residents cansee how much various agencies or pro-grams (e.g., Washington State Univer-sity, the entire transportation program)have spent year to year.

Agency and program accountability:Washington empowers residents tohold government agencies and pro-grams accountable for their spending.On Washingtons website is a tool thatcompares Washington agencies and

Figure 11: Washingtons Agency and Program Accountability Application



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programs estimated spending andtheir actual spending. With an intui-tive drilldown feature, visitors can viewthe estimated vs. actual spending forbig agencies, such as the Departmentof Social & Health Services, and small

programs such as the library system atthe University of Washington. Visi-tors can also view which government

coffers (for example, Federal GeneralFund, State Toxics Control Account,etc.) supplied the funds. If an agencyor program spends more or less thanprojected, visitors can then see wherethe over-spending or under-spending

came from (salaries, travel expenses,goods and services procurement). (SeeFigure 11.)



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The researchers of this report surveyedofficials from the 50 states askingthem to identify the biggest obstacles

and challenges that they faced in introduc-

ing transparency in their state. The barri-ers mentioned to implementing transpar-ency ranged from antiquated technologi-cal systems to the simple lack of adequateresources and funding.

The most commonly mentioned chal-lenge for states to overcome in develop-ing and implementing transparency web-sites is a lack of funding for transparencyprojects. Even among the states that hadalready developed transparency websites,

many reported doing so with very limitedfunds, or in some cases, no budget at all.In many cases transparency websites werecreated only with existing resources. Aswe reviewed earlier, the cost to implementtransparency best practices can be quite

small compared to the reward if institutedand used properly and actively.

The current economic and political cli-

mate has left states with crippling budgetdeficits and forced them to tighten theirbelts. This can make it difficult for gov-ernment departments managing budgetinformation to secure the resources need-ed to invest in new transparency systems,especially if the benefits are viewed asmore distant in the future. In Arizona, theobstacle cited by state officials was a lackof funding. No additional money was pro-vided to help develop the newly mandatedwebsite. Arizona overcame this challenge

by using existing fiscal and personnel re-sources from the General Accounting Of-fice (GAO) of the Arizona Departmentof Administration. Officials found othercreative ways to keep down the costs ofimplementing transparency by using a

State Officials Face Obstacles and

Challenges in OperatingTransparency Websites



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system currently in use by another state andmodifying it to Arizonas particular needs.37Even state officials in Kentucky, which isleading the way by implementing the besttransparency practices, described how thestate used existing resources to implement

transparency when no funding was specifi-cally dedicated to the project. The officialsacknowledge that the lack of funding limitswhat they are able to accomplish.38 Otherstates that have expressed similar chal-lenges in dealing with a lack of fundingwere Colorado, Massachusetts, Mississippi,Montana, Oregon, and Virginia.39

The next most-cited obstacle for statesto overcome was coordinating the manymoving pieces of a state government.It takes time and effort to coordinatemany different agencies, especially wheredifferent agencies lack consistent anduniform ways of reporting or storinginformation. Officials in Indiana andGeorgia, for instance, cited the lack of

uniform information and reporting systemsas a major impediment in the creation of acentralized location for data collection andtransparency of state spending.40 Otherstates citing similar concerns includedArizona, Louisiana, Montana, Nebraska,

North Carolina, and Utah.41

A final main obstacle for states is over-coming antiquated accounting systems.This has been a problem for both Arizonaand Virginia, but they have been able tofigure out ways to still develop transpar-ency websites.42 Montana, though, hasbeen less fortunate. Montana officials be-lieve that their accounting systems are soantiquated that launching a transparencywebsite as recommended in this reportwould cost $2,719,780, with ongoing costson an annual basis between $620,000 and$670,000. They estimate the bulk of thetotal cost to be in the software, databaselicensing, and maintenance which wouldcost an estimated $2,186,002.43

State Officials Face Obstacles and Challenges 37


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Despite the continued momentumtoward Transparency 2.0as evi-denced by the improvement states

made to their online spending transpar-

ency websites in 2010state governmentshave a long way to go in ensuring that citi-zens have ready access to comprehensiveinformation about how their taxpayerdollars are spent.

Many state transparency websites stillhave room for major improvement.

Most transparency websites do notprovide detailed information on gov-ernment contracts. Even some of the

leading websites provide only a shortdescription of the purpose of contracts.

Only about half of the websites allow us-ers to download datasets in formats suchas Excel, enabling more detailed off-lineanalysis of government spending data.

Only 26 states include spending dataprior to Fiscal Year 2009.

Only 14 states provide links to their

tax expenditure reports.

Only 14 states provide any informationabout local and county spending.

Only four states provide the mostcomprehensive level of informationon grants and economic developmentincentives awarded to companies andorganizations.

In the next year, state governments

across the country should strive to im-prove government accountability. Leadingstates should advance the Transparency 2.0movement by continuing to develop inno-vative functions that elevate transparencyand citizen involvement. Emerging statesshould follow the example of the leading

Continuing the Momentum Toward

Greater Transparency:Challenges and Recommendations



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transparency states by improving the searchfunctions on their websites and increas-ing the amount of information available tothe public. Lagging states need to join theranks of Transparency 2.0 governments byestablishing one-stop, one-click searchable

websites that provide comprehensive infor-mation on government expenditures.

Overall, state governments should makesite navigation more intuitive and allowvisitors to tailor their online searches byyear or geography. States should also al-low residents to view details on state loansgiven to companies, state revenue sources,state debt accrued through selling bonds,and other spending information.

Public budgets are the most concreteexpression of public valuesarticulatedin dollars and cents. As states grapple withdifficult decisions in an effort to makebudgetary ends meet, transparency web-sites provide an important tool to allow

both citizens and civil servants to makeinformed choices.

With continued progress toward on-line spending transparency, citizens inthe not-too-distant future will be able tofeel confident in knowing that each dollarof state expenditure is accounted for andthat they can play a more constructiverole in debates over how those dollars arespent.

Continuing the Momentum Toward Greater Transparency 39


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Appendix A: Transparency Scorecard

State GradePointTotal

Checkbook-Level Website

Search byContractor

Search byActivity

Contract orSummary

InformationAvailable

Down-loadable

Total Possible 100 35 10 10 10 2

Kentucky A 96 35 10 10 10 1 Texas A 96 35 10 10 10 2 Indiana A- 93 35 10 10 10 2 Arizona A- 92 35 10 10 10 2 Louisiana A- 92 35 10 10 5 2 Massachusetts B+ 87 35 10 10 5 2

North Carolina B 85 35 10 10 5 0 Ohio B- 82 35 10 10 10 0 Oregon B- 82 35 10 10 3 2 New Jersey C+ 78 35 10 10 3 2 Pennsylvania C+ 78 35 10 10 10 0 Virginia C+ 77 35 10 10 3 2 Missouri C+ 76 35 10 10 3 2

Alabama C 74 35 10 10 5 2 Georgia C 74 35 10 10 3 2 Nevada C 74 35 10 10 5 0 Illinois C 73 35 10 10 3 0 Kansas C 73 35 10 10 3 0 Minnesota C 73 35 10 10 3 2 New York C 73 35 10 10 3 2 Hawaii C 72 35 10 10 5 0 Maryland C 71 35 10 0 5 0 Nebraska C 71 35 10 10 3 0 Colorado C 70 35 10 10 5 2 Michigan C 70 35 10 0 10 2 Mississippi C 70 35 10 10 10 0 Utah C 70 35 10 10 5 2

Oklahoma C- 66 35 10 0 0 0 Rhode Island C- 66 35 10 10 0 2 South Dakota D+ 63 35 10 0 10 0 California D+ 62 35 10 0 4 2 Delaware D+ 61 35 10 10 3 0 New Mexico D+ 61 35 10 10 3 0 South Carolina D+ 61 35 10 0 3 2 Wisconsin D+ 61 35 10 10 3 0

Florida D 59 35 10 0 5 0 Vermont D 55 35 0 0 3 2 Wyoming D- 50 35 10 0 0 0 Tennessee D- 49 35 0 0 3 0 Alaska D- 47 35 0 0 3 2 Connecticut F 39 0 10 10 5 0 Iowa F 32 0 10 10 5 0 Arkansas F 28 0 10 10 5 0 West Virginia F 28 0 10 10 5 0 Washington F 22 0 0 0 5 0 Montana F 16 0 0 10 5 0 New Hampshire F 7 0 0 0 0 1 Idaho F 6 0 0 0 5 0 North Dakota F 6 0 0 0 5 0 Maine F 0 MUST BE A VENDOR TO ACCESS WEBSITE

Co



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ormationon Taxenditures

EconomicDevelopment

Incentivesand Grants

Quasi-Public

Agencies

ARRAFundingLinked

Local/County

Spending Website Address

10 10 2 2 2 2

9 10 2 2 2 0 opendoor.ky.gov9 7 2 2 2 2 www.texastransparency.org6 9 2 0 2 2 www.in.gov/itp9 10 2 2 2 0 openbooks.az.gov

10 9 2 2 2 0 www.latrac.la.gov6 6 2 2 2 2 www.mass.gov then click Massachusetts

Transparency link9 8 2 2 2 2 www.ncopenbook.gov0 10 2 0 2 0 transparency.ohio.gov

10 8 2 0 2 0 www.oregon.gov/transparency7 2 2 2 0 0 nj.gov/transparency0 6 0 2 0 0 contracts.patreasury.org/search.aspx0 4 2 2 2 2 datapoint.apa.virginia.gov0 8 1 0 2 0 mapyourtaxes.mo.gov/MAP/Portal

0 4 1 2 2 0 open.alabama.gov6 2 2 2 2 0 open.georgia.gov0 2 1 2 2 2 open.nv.gov0 10 1 2 2 0 accountability.illinois.gov6 0 2 0 2 0 kansas.gov/kanview0 2 2 2 2 0 www.mmb.state.mn.us/tap0 6 1 2 2 2 www.openbooknewyork.com0 4 1 0 2 0 hawaii.gov/spo26 6 2 2 2 0 spending.dbm.maryland.gov0 4 2 0 0 2 nebraskaspending.gov0 4 2 0 2 0 tops.state.co.us9 0 2 0 2 0 apps.michigan.gov/MiTransparency0 0 1 2 2 0 www.transparency.mississippi.gov0 4 2 0 2 0 utah.gov/transparency

10 6 1 2 2 0 www.ok.gov/okaa0 2 2 0 0 0 ri.gov/opengovernment0 2 0 2 2 2 open.sd.gov0 0 2 0 2 2 www.reportingtransparency.ca.gov0 2 1 0 0 0 checkbook.delaware.gov0 2 1 0 0 0 contracts.gsd.state.nm.us0 0 2 2 2 2 www.cg.sc.gov/agencytransparency0 0 1 0 2 0 www.ethics.state.wi.us/contractsunshine/

contractsunshineindex.html0 0 2 0 0 2 myfloridacfo.com/transparency0 6 2 2 0 0 finance.vermont.gov0 0 1 2 2 0 www.wyoming.gov/transparency.html0 2 2 2 2 0 tn.gov/opengov0 2 2 0 0 0 fin.admin.state.ak.us/dof/checkbook_online0 4 1 0 2 2 www.biznet.ct.gov/scp_search0 4 1 0 2 0 www.das.gse.iowa.gov/iowapurchasing0 0 1 0 2 0 www.dfa.arkansas.gov/offices/procurement0 0 1 0 2 0 www.state.wv.us/admin/purchase0 6 2 2 2 2 fiscal.wa.gov0 0 1 0 0 0 svc.mt.gov/gsd/apps/TermContractDefault.aspx0 0 2 2 2 0 www.nh.gov/transparentnh0 0 1 0 0 0 adm.idaho.gov/purchasing0 0 1 0 0 0 secure.apps.state.nd.us/csd/spo/services0 www.maine.gov/purchases

Feedback

Appendix A 41


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Grades for the scorecard were deter-mined by assigning points for in-formation included on (or in some

cases, linked to) a states transparency

website, or a government procurementwebsite that provides information on gov-ernment spending. (See Table 5 for a de-tailed description of the grading system.)

What we gradedOnly one website was graded for eachstate. If states had a transparency web-site, that site was graded. The Vermont

Department of Finance & Managementswebsite was graded as a transparency web-site because of breadth of information it

offered on government spending. If statesdid not have a transparency website, theirprocurement website was graded. Mainesprocurement website was not given any

credit because it is only accessible with avendor identification number.

The grades in this report reflect thestatus of state transparency websites asof January 3, 2011, with the exception ofcases in which state officials alerted us tooversights in our evaluation of the web-sites or changes that had been made to thewebsites prior to mid-February 2011. Inthese cases, U.S. PIRG Education Fundresearchers confirmed the presence of the

information pointed out by the state of-ficials and gave appropriate credit for thatinformation on our scorecard.

Appendix B: Methodology



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How we gradedThe

following-the-money-2011 - iowa pirg

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