Colorado Spending Transparency

Apparently the state provides $500 lunches and taxpayers don’t need to know about them according to State Controller David McDermott.

The Denver Post reports that State Rep. BJ Nikkel, sponsor of the Colorado Taxpayer Transparency Act, accuses McDermott of violating the spirit of the law, violating taxpayer trust and violating transparency.

It’s easy to see Rep Nikkel’s point when McDermott is the information gatekeeper and drops gems like this: “‘We really don’t need people to search for the $500 (lunch). We need them to know what’s really happening with their government.’”

The point of transparency is that it is not up to McDermott to decide how much information taxpayers need.  It is up to taxpayers, and they want detailed financial information.

McDermott also cites an old computer system as to why he can’t provide detailed information.  Seems funny that a state like Colorado on the cutting edge of green technology can’t compete with dozens of other states that show their taxpayers how their money is spent.

A reporter asked Colorado Transparency Project Director Amy Oliver Cooke, a member of the Colorado Long Term Economic Stability Commission, if real cuts in spending need to be made in Colorado’s budget where would she make them?  She answered,

I don’t know because I don’t have specifics on where the state spends its money.  That’s why we need transparency.  If we can see where every dime is spent, then all of us can make suggestions.  Right now if we had full transparency, we would have almost 5 million sets of eyes, stakeholders and taxpayers, engaged in the process — coming up with their ideas for efficiency and cost savings.  Vendors and suppliers could be providing goods and services in a more competitive process.

Amy does agree with Governor Ritter’s Budget Director that TABOR, while on time-out the last five years, has helped to cushion Colorado from some of the problems that other states such as California have.  Under TABOR, Colorado lawmakers could not spend like drunken sailors on shore leave.  As the Denver Post said:

Colorado is not California and is not in any danger of becoming California with its $24.8 billion budget gap, in part because of a different budget structure.

The fact that “we are obligated to balance the budget each year has actually protected Colorado,” Saliman said.

He never mentioned TABOR by name, but Saliman also credited “constitutional budget provisions that rein in spending.” The 1992 Taxpayer’s Bill of Rights, or TABOR amendment, controls taxation and spending.

With Colorado starting fiscal year 2009-2010 nearly $400 million in the red, this budget crisis is just another reason why this state desperately needs complete transparency in all levels of government.

During the last legislative session, COST came to realize that anti-transparency forces not only exist but they work very hard to block the sunshine on government.  We exposed how lobbyists, State Controller David McDermott, some legislators, school administrators and Governor Bill Ritter all tried to kill transparency legislation. 

But the state of Maine did Colorado anti-transparency forces one better (or worse depending on your perspective).  According to the Bangor Daily News, Maine state legislators actually introduced a bill that would make “public information unavailable to the public.” 

The bill was directed at state based, free market think tank the Maine Heritage Policy Center after it published the names, titles and salaries of state employees on the organization’s transparency Web site. 

Fortunately the bill recently failed but we must never forget how far those who can spend our money will go hide it from us.  That legislators would try to pass a law to forbid public information is chilling.  COST realizes that transparency is more important than ever.

Westby G. Fisher, MD of Illinois, known as Dr. Wes on his blog, picks up on Linda Gorman’s irony when she wrote about HB 1293 the “health care affordability act” in her most recent Issue Backgrounder.  In his post “The Ultimate Irony: A Sick Tax to Make Health Care Affordable,” he writes:

[L]ook for cash-strapped legislatures across the country to consider a this latest tactic to feed from the Medicare National Bank: in Colorado, held to lower taxes by their self-imposed “Tax Payers Bill of Rights” (or so-called TABOR law enacted in 1992), legislatures have resorted to a “sick tax” cleverly disguised as a hospital fee added without line-item status to hospital bills.

He then proceeeds to cite Linda’s paper as he muses about how ridiculous it is to claim that health care will be more affordable if sick people are taxed in secret.  COST would laugh at how insane this all sounds if we weren’t actually living the fiscal nightmare.

What is Governor Ritter so afraid of?  Apparently showing Colorado taxpayers how their money is spent.  Amy Oliver, Director of the Colorado Spending Transparency Project, had this to say in a press release:

April 2, 2009amy@i2i.org

Contact:   Amy Oliver, Director, Colorado Spending Transparency Project
970-371-3413,

Ritter’s Transparency Executive Order Falls Short
Detailed State Spending Can Be Omitted from “Transparency Online Project”

GOLDEN—Colorado’s leading advocates of open government say the governor’s call for an online database of state finances is a commendable gesture but falls short on the details.

Today Governor Bill Ritter issued an executive order to establish the “Colorado Transparency Online Project”—described as “a statewide searchable database system of the state’s revenues and disbursements.” However, a provision in the order indicates the system “may provide access to aggregated information” rather than “individual transaction” details, if state officials deem those details might hinder accountability.

“That’s a loophole big enough to hide much of the government spending Coloradans demand to see,” said Amy Oliver, director of the Independence Institute’s Colorado Transparency Project (COST). “Put the details in front of taxpayers, and let them decide.”

The state’s General Assembly meanwhile is considering House Bill 1288,  the Colorado Taxpayer Transparency Act, which would create a detailed online searchable database of state government financial transactions.  State Representative BJ Nikkel’s bill enjoys significant bi-partisan support and would provide more detail.

“Coloradans would be better off with transparency in statute, something that could only be changed by an open process that includes citizen input,” Oliver said. “As for the governor’s order we’ll have to wait and see, but this really isn’t a promising start.”

Other states have generated real efficiencies through spending transparency. For example, Texas’ “Where the Money Goes” website with detailed information down to the pen and pencil level has allowed the state to realize nearly $4 million in cost savings.

The Independence Institute is a non-partisan, non-profit public policy research organization based in Golden, Colo.
###

Other transparency advocates have weighed in as well.  Josh Culling from the National Taxpayers Union called Ritter’s attempt at transparency “pointless.”

Americans for Tax Reform chimed in as well calling the executive order a “toothless tiger.”

HB 1288, Colorado Taxpayer Transparency Act, is scheduled to be heard in the House Appropriations Committee on Friday, April 3.  Public testimony is not taken but concerned citizens can contact members of the committee before the hearing to let them know how they feel. (List of members below)

A couple of points to remember:

The cost of implementing a database seems to be the biggest argument against it.  However the $72,000 fiscal note should not be considered in a vacuum but rather in the context of an investment in state budget cost savings. 

Other states that have embraced spending transparency with an online database have enjoyed tens of thousands and sometimes millions of dollars in savings. For instance, Texas has enjoyed nearly $4 million in cost savings since investing in an online government spending database.  So while yes there is an initial cost, the database more than pays for itself with cost savings. 

This database will help Colorado provide services to taxpayers in a more efficient and cost effective manner.  It also serves as a concrete example of government’s faith in citizens that taxpayers can appreciate and understand the information provided.

Second, COST believes transparency should be in statute even though Governor Ritter says he will implement transparency with an executive order, and COST has praised Governor Ritter for his support of transparency in government.  But the legislature should not abdicate its power and authority to another branch of government.  This is too important to leave to the discretion of the executive branch.  The next governor may not and may decide to exclude the executive branch from open transparent government.

COST will keep readers posted on the progress of 1288.

Colorado House Appropriations Committee Members

mferrandino@yahoo.com;
bob.gardner.house@state.co.us;
repjoeljudd@joeljudd.com;
john.kefalas.house@state.co.us;
andy.kerr.house@state.co.us;
james.kerr.house@state.co.us;
beth.mccann.house@state.co.us;
don@donmarostica.com;
sal.pace.house@state.co.us;
jack.pommer.house@state.co.us;
jim.riesberg.house@state.co.us;
jerry@repsonnenberg.com;
glenn.vaad.house@state.co.us

Mark Ferrandino 303-866-2911
Bob Gardner 303-866-2191 Sponsor
Joel Judd 303-866-2925
John Kefalas 303-866-4569
Andy Kerr 303-866-2923
Jim Kerr 303-866-2939 Sponsor
Beth McCann 303-866-2959
Don Marostica 303-866-2947
Sal Pace 303-866-2968
Jack Pommer 303-866-2780
Jim Riesberg 303-866-2929
Jerry Sonnenberg 303-866-3706 Sponsor
Glenn Vaad 303-866-2943

Amy Oliver sent an email to DPS Emergency Financial manager Robert Bobb inquiring about transparency in the Detroit Public School system. 

Amy’s email asked, “Why do you embrace transparency? How did you become convinced that it would help the Detroit Public School system?  How will you pay to put the information online?”

Steven Wasko, Executive Director of the Office of Public Relations, responded:

It is imperative for our success that all constituents are provided the opportunity to be informed, and a true sense of transparency involves not only making all of our actions public but also instilling a sense that all credible feedback is thoroughly reviewed and acted upon.  Engaging our stakeholders, indeed, means making all of our finances, reports, orders and communications public, but that would be nothing but another example of one hand clapping if there are not specific and vital ways for the community to engage in developing an overall vision of 21st Century education for its children.

At thi point in DPS (Detroit Public Schools), we are researching the feasibility of placing our checkbook online.  In response to a constituent question on an anonymous email/hotline that was set up, Emergency Financial manager Robert Bobb has directed our IT department to research and report back on the steps that it would take to achieve this.

Other examples of documents which we immediately placed on our website are requests made to the State of Michigan, and their response.

Mr. Wasko explains how the idea came about (an anonymous email) and why the district embraces transparency but doesn’t address Amy’s question about cost.  COST assumes that if transparency is a priority, then even a district with serious financial issues will figure out to provide expenditures online in an easily accessible format.  It seems that DPS realizes that engaging “stakeholders” will help rather than hinder the struggling district.  Again, COST wishes Detroit Public Schools the best of luck because kids’ futures are at stake.

COST is impressed with Robert Bobb, the new Fiscal Manager for Detroit Public Schools (DPS).  According to the Detroit Free Press, Bobb “will place its financial records in plain sight, online, so that tax-payers can follow every dollar.”

DPS is a district in financial turmoil with a “shameful” history of record keeping that includes an inability to maintain a proper paper trail for its debts.  Apparently DPS right now owes “at least $72 million in vending services that have been outstanding 30 days or longer.”

Bobb is confident that he can get DPS’s fiscal house in order and bring transparency to the district within the next year.  Bobb’s desire to bring transparency to DPS stands in stark contrast to Colorado’s education establishment.

COST looks forward to tracking transparency in Detroit Public Schools and wishes Colorado’s school districts would make the same kind of commitment.

Congratulations Corn Huskers!  Your state beat Colorado to transparency in state government.  In a Wall Street Journal editorial, Nebraska State Treasurer Shane Osborn articulated how and why he led the effort to create NebraskaSpending.com, a searchable, online database that “discloses every aspect of state government spending.”  And Treasurer Osborn did it for a mere $38,000. 

Rather than fearing Nebraskans’ examination of state expenditures, Osborn says, “By allowing the public to examine how its money is spent, we are equipping Nebraskans with great tools to hold their government accountable.”

He acknowledges that sometimes taxpayers will uncovered items “that can’t be explained or that some don’t want made public.” But the Osborn is not defensive.

For example, while setting up NebraskaSpending.com we found a surprising amount of money spent on size 13 boots by the department of corrections. When officials realized their numbers were about to be put online, they updated their expenditures to reveal that the money had actually gone to guard uniforms. Once our site went live, we got calls from other agencies asking to update their numbers. They knew Nebraskans would pay attention.

And Nebraskans did pay attention. Over 400,000 visitors have perused NebraskaSpending.com, spending an average of 20 minutes per visit.

COST hopes one day Coloradans can boast about being beating Nebraska with an even better transparency site.  If HB 1288 passes, then we will.

Several bills making their way through the Colorado legislature look to usher in a new era of transparency in Colorado.  The Public School Financial Transparency Act passed the Senate with overwhelming bi-partisan support and now faces a hearing in the House Education Committee.  Senator Morgan Carroll’s legislation looks to bring more accountability to special districts. 

Now Coloradans can participate in the passage of the Colorado Taxpayer Transparency Act, which will be heard in the House Finance Committee this Wednesday, March 4 upon adjournment — probably around 9:15 a.m.  Representative BJ Nikkel’s bi-partisan legislation will put into statute a free, searchable, online data base for expenditures and revenues in Colorado.

Hopefully NIkkel will find support from Colorado’s Executive branch.  Governor Bill Ritter embraced transparency in his State of the State speech.  Treasurer Cary Kennedy said on Amy Oliver’s (Amy is also the Director of the Colorado Transparency Project) radio show last Wednesday that Kennedy supports transparency efforts and thanked the Independence Institute for its work on transparency.  Furthermore, Kennedy said that by the end of the year Coloradans will be able to search state expenditures by agency and vendor. Previously, Kennedy had been hesitant to commit to a specific time frame.  The end of the year in line with Nikkel’s legislation.

Transparency is an idea that is long overdue in Colorado.  Nineteen states already have some kind of online spending transparency.  Costs have ranged anywhere from nothing to $300,000. 

Representative Don Marostica introduced legislation in Colorado in 2007 and planned to do so again this year until Governor Ritter’s State of the State speech.  However, NIkkel and her 37 co-sponsors recognize what Marostica overlooked.  Eight of the nineteen states with financial transparency Web sites are backed up with legislation.  While Ritter seems to support transparency, the next adminstration may not and if it is not in state statute then a simple swipe of a pen could reverse the transparency trend.   COST also doesn’t want transparency to be at the whim of an unelected bureaucrat.