Maybe, just maybe, our federal leaders will really embrace transparency this year. There is some positive news coming out of President-elect Obama's recent meeting with congressional leadership. According to ABC News:
Democratic and Republican sources tell ABC News that President-elect
Obama's meeting with the bipartisan congressional leadership of the
House and Senate went well with some quick agreement on the need for
expeditious action as well as oversight and transparency for the
pending, yet-to-be-drafted multibillion dollar stimulus package.
House Minority Leader John Boehner, R-Ohio, argued that public
dissatisfaction with the Troubled Asset Relief Program money to help
stabilize the nation's financial systems and the way it was rammed
through the Congress demands more transparency and accountability with
the stimulus bill.
"I agree with you," the President-elect said, adding later that he
would "demand complete transparency and accountability in doing it." ·
House Minority Whip Eric Cantor, R-Vir., suggested said the bill
should be put on the Internet a week before Congress votes on it.
Mr. Obama smiled and said something along the lines of, "maybe if I
was better at faking it , I'd say, 'Great idea -- we'll take you up on
that.' But we've actually talked about this idea."
Obama turned it over to incoming White House chief of staff Rahm
Emanuel who essentially said they would do the Republicans one better.
They're planning a Google-like search function to show every program
funded by the stimulus package, whether it comes in under or
over-budget, whether it is meeting its intended purpose, and how many
jobs it is creating.
This is a fantastic idea and should be expanded to the full federal budget. In fact, it's not a bad idea for the state budget either and would be a natural complement to the new state budget website.
The Washington State Parks and Recreation Commission has made extensive efforts to improve the parks system and facilities through its Centennial 2013 plan. The audit found Parks is at risk of failing to achieve all of the goals it communicated to citizens in the Centennial 2013 Plan . . .
1. The Commission’s strategic plan lacks some key elements that can impact its achievement of its vision and goals.
2. The Commission needs to make improvements in governance to ensure it meets its vision, goals and objectives.
3. The Agency does not have a performance management system that
provides reliable information to assess its progress in meeting goals
and that allows it to make budget and operating decisions.
4. The Agency’s information technology systems do not support efficient operations.
5. The Agency has not realized the efficiency and economy in its
payroll and human resource processes that they expected to gain from
6. The Agency’s decentralized approach to governance and lack of
documentation can lead to practices and procedures that do not comply
with state law, agency policy, and do not promote the most efficient
and economical use of state resources.
On a positive note the Department of Revenue received its sixteenth-straight clean audit report today. Here is an excerpt from DOR's press release:
The annual audit issued today by State Auditor Brian Sonntag contained no findings, or problems with how the Department processed $18.2 billion in tax revenue annually, including 96 percent of all state general fund tax collections and all local sales taxes.
“This outstanding record is indicative of management’s interest in compliance with the laws and regulations applicable to your agency,” Sonntag wrote in his cover letter to the audit. “It’s important to give special recognition to agencies that consistently exhibit a commitment to solid accounting practices and systems of internal control.”
Sonntag said he appreciated the cooperation and assistance provided by Revenue staff!
as his auditors examined the agency’s extensive operations.
There will be a lot written and said about the Governor's budget in the coming days. We will hear a lot about drastic cuts and how the state will cease to function because of the Governor’s proposed changes. One point that may get lost in the debate but shouldn't is the fact that despite very real reductions in some programs, overall state spending will still be higher biennium over biennium if the Governor's budget is adopted.
That's right - the overall budget will still grow over previous cycles.
General Fund State Spending Growth (Dollars in Millions)
*As proposed by Governor 12/18/08
How is this possible? Despite the economic situation state revenues are still projected to grow biennium over biennium though at a slower rate than initially thought but it is growth nonetheless. This is in contrast to the 2001-03 budget cycle when revenues actually decreased from the 1999-01 levels.
General Fund State Revenue Growth (Dollars in Millions)
We'll have more to say about the Governor's budget after we've had time to read it line-by-line. Assuming the Governor effectively prioritized and selected those programs demonstrating the best results, she should fight hard for her proposal and not let the Legislature use it as a floor for budget discussions. She should also fight legislative efforts to raise taxes.
The Governor is absolutely correct when she said today: "No way to tax your way out of this problem. We have to live within our means."
The Examiner (Washington, D.C.) published our op-ed today on the need for President-elect Obama to make fundamental reforms to improve government transparency and accountability. I teamed up with Patrice McDermott, Director of OpenTheGovernment.org, to write the op-ed.
It is based on the national 21st Century Right to Know Coalition's recommendations to Obama published last month.
Even if secrecy was not on the rise, President-elect Obama would still face significant challenges in making government more transparent. At t!
he root of the problem is that government is still grounded in a 20th century (some might even say 19th century) approach to openness. Yet today’s interactive technologies make it possible to make quantum leaps forward in improving transparency.
Transparency is a powerful tool to demonstrate to the public that the government is spending our money wisely, that politicians are not in the pocket of lobbyists and specials interest groups, that government is operating in an accountable manner, and that decisions are made to ensure the safety and protection of all Americans. Effective transparency means that the public has access to accurate information in a timely manner. With today’s technology, it also means such information should be available in searchable formats, making it easier for commercial or government search engines to sift through mountains of material . . .
Obama has many transparency models he can pull from. For example, immediately upon!
taking office in January 2007, Florida Governor Charlie Crist!
issued an executive order on government ethics that created a new Office of Open Government; ordered training on public records, open meetings, and records retention; required comprehensive reviews of agencies’ performance in providing the public access; and directed agencies to use plain language to make information more understandable. The Crist order is a perfect example of laying out a policy vision for government transparency in a manner that conveys the importance of the issue.
Even though Washington State is ahead of the curve when it comes to open government, there are many recommendations from the 21st Century Right to Know Coalition's report in Chapters D & E that are
applicable for the state.
. . . so says Speaker of the House Frank Chopp. According to the Tri-City Herald:
House Speaker Frank Chopp said Washington's projected deficit may not be as bad as it looks.
a Seattle Democrat, was in the Tri-Cities on Friday for a forum with
the Columbia Basin Badger Club, a local group that grills politicians
and newsmakers on political issues without taking sides.
club members from the audience of about 75 asked Chopp about the state
budget, which officials estimated in November would face a $5.1 billion
shortfall in the upcoming biennium.
But Chopp said
the doom-and-gloom prophecies include estimates for $1 billion in
spending on new programs, which seems unlikely given the current
"In fact, we won't do that now," he said.
Some programs -- like the idea of offering all-day kindergarten -- will have to wait until the economy turns around, he said.
identified several ways he expects the Legislature will look at
slashing spending so it doesn't have to borrow money to balance the
Among those were cutting programs added to the budget in
recent years that aren't working, like a job search program through the
Employment Security Department that has only a 5 percent success rate.
"We're going to wipe that out," Chopp said.
Kudos to the Speaker for putting the budget discussion into context. It is also important to remember that state revenues are projected to be $855 million higher in the current budget than the last and $1.4 billion higher for the next budget.
General Fund State Revenue Growth (Dollars in Millions)
Source: Washington State Economic and Revenue Forecast Council
It will be very interesting to see what the Governor proposes this Thursday when she releases her budget. Last week WPC sent the Governor our suggestions for budget reform. Here is an excerpt from our letter:
Washington Policy Center would like to offer its assistance in light of the state’s budget outlook. We appreciate your commitment to balance the 2007-09 and 2009-11 budgets without raising new taxes and fees. We share your belief that this is a unique opportunity to rethink what the government does and how it delivers vital services to the public.
Our organization stands ready to help in any way that you find useful to bring about the fundamental budget ref!
orms in which you have expressed interest . . .
To offer constructive suggestions, we have enclosed our “Do not buy list,” which we adapted from your 2009-11 Priorities of Government report, as well as a list of eight reforms that we believe will help put the state on the path toward a sustainable performance-based budget.
I'm a little late on this post but last week the Joint Legislative Audit and Review Committee (JLARC) released a pre-audit report reviewing the state's 470 boards and commissions. According to the report: "At the beginning of this project, no single list identified all of Washington’s boards and commissions."
Thanks to the work of JLARC, there is now a good description of each board and commission starting on page 25 of the report. Included are details on when it was created, authorizing statute, costs, and number of meetings.
Another nugget from the report is Appendix 2 - Statute Summary:
The Legislature has declared that boards and commissions have been:
• Created in excessive numbers;
• Created without legislative review or input and without a!
n assessment of whether there is a resulting duplication of purpose or process;
• Duplicating duties of existing governmental entities, creating additional expense, and obscuring responsibility; and
• Difficult to control in terms of growth because of the many special interests involved.
Accordingly, the Legislature established a process found in Chapter 43.41 RCW to eliminate redundant and obsolete boards and commissions and to restrict the establishment of new boards and commissions (RCW 43.41.220).
The Legislature also finds that the “continued proliferation of both statutory and non-statutory groups of this nature without effective, periodic review of existing groups can result in wasteful duplication of effort, fragmentation of administrative authority, lack of accountability, plus an excessive and frequently hidden financial burden on the state.” (RCW 43.88.500)
Furthermore, the Legislature finds t!
hat a lack of current and reliable information about boards an!
d commissions hinders the effectiveness of legislative oversight and review these entities. Therefore, the Legislature has created a central clearinghouse in the Office of Financial Management (RCW 43.88.500).
It looks like the need for each of the state's 470 boards and commissions should also be part of the current budget savings debate.
The new searchable budget website authorized by SB 6818
(Promoting transparency in state expenditures) will be launched tomorrow by the Legislative Evaluation and Accountability Program
Committee (LEAP) and the Office of Financial Management (OFM). SB 6818
was based on Washington Policy Center’s (WPC) recommendation for the
state to adopt a searchable budget website. It passed the legislature
unanimously in 2008.
searchable budget website provides an unprecedented level of
interactivity allowing users to create their own budget reports to
compare state spending over time.
This website is a great resource for citizens regardless of the level of their budget expertise. From the green eyeshade policy analyst to the casual observer, users
can create a customized look at how our tax dollars are being spent.
Included on the website are details on:
state expenditures by fund or account
expenditures by agency, program, and subprogram
state revenues by source
state expenditures by budget object and subobject
state agency workloads, caseloads, and performance measurements.
budget website also links to performance information on the Government
Management Accountability and Performance (GMAP) website and OFM’s
website on personal services’ contracts.
To help build on
the success of Fiscal.wa.gov, WPC sent letters to GMAP and OFM
encouraging these agencies to enhance their websites to mirror the
functionality of the new budget website. This effort could also serve
as a template for creation of a tax transparency website. Earlier this
year WPC released a proposal for a ‘Taxation Disclosure Act’ similar to
We are hopeful that state officials will
build on the success of the new budget website and also make details on
taxation more transparent to help citizens learn more about what
government decisions mean to their pocketbooks.
adopted by state officials, the tax transparency proposal would set up
an online database where users could find their state and local tax
rates (such as property and sales taxes) by entering their zip code,
street address, or by clicking on a map showing individual taxing
district boundaries. An online calculator would let citizens determine
their total tax burden and which officials are responsible for which
parts of it.
One change worth discussing, however, is to focus the program more on state versus local performance audits. Local performance audits add good value (example Port of Seattle audit). After all taxpayers savings are taxpayer savings whether state or local but the bigger bang for the buck may be realized by digging deeper into state programs and spending.
What shouldn't be on the table, however, is eliminating performance audits. Now more than ever the state needs to be looking at ways to improve the economy, efficiency and effectiveness of every tax dollar spent.
The Department of Information Services (DIS) last week launched a YouTube site for the state. This is part of the state's effort to "incorporate Web 2.0 functionality that helps us expand our public outreach."
Earlier this year DIS put out a Request For Proposal (RFP) to provide the state with "a web search tool that assists with strengthening the relationship between lawmakers and their constituents by maximizing transparency of the work of government."
This effort is continuing but may run into budget pressures due to the state's fiscal outlook.
In the meantime the state's new searchable budget website is scheduled to go live next month. I had the opportunity to see a demo of the site and am happy to report it won't disappoint. We're encouraging the Governor's GMAP Office and the Office of Financial Management to enhance their websites to mimic the functionality of the pending searchable budget website. (WPC letters here and here)
It looks like the Governor has also caught the Web 2.0 bug; her office launched a redesigned website last week. The Governor noted in a press release:
“To be effective and responsive, state government must stay in tune with changing technologies. This new Web site provides opportunities for Washingtonians to easily find the information they need about how the governor’s office works on their behalf and readily provide feedback.”
The Washington State Auditor’s Office is revamping its Web site, www.sao.wa.gov. We are asking citizens, audit clients and interested parties to provide feedback on the usability of our existing Web site and suggestions for our new Web site. The brief survey is available at http://www.surveymonkey.com/s.aspx?sm=4rnLG0uBAXDY8uaa9S11hg_3d_3d and closes at 5 p.m. on Dec. 4. Thank you for your time and assistance in improving the Washington State Auditor’s Web site.
Though the shock of yesterday's revenue forecast will not soon fade a great opportunity is at hand if lawmakers will rise to the occasion. The unsustainable spending growth of the past is being brought back to reality by the economy. If state officials respond by enacting a meaningful constitutional spending limit next year we may be able to avoid future headlines of multi-billion dollar deficits.
Consider what may have been had I-601, the 1993 voter-approved spending limit, not been eviscerated by lawmakers in 2005. During I-601's heyday (1993-2005), state spending growth averaged just under 8 percent per budget. Assuming an even more liberal 10 percent budget growth since 2005, state spending today would be $1.2 billion lower.
Projected General Fund State spending based on 10 percent growth since 2005 (Dollars in Millions)
Actual General Fund State spending growth since 2005 (Dollars in Millions)
Today's headlines will likely read: "State revenue down $1.9 billion." This is the news coming out of the state revenue forecast. What is important to remember, however, is despite this decrease, revenue is still projected to grow by 5% in the next budget cycle and revenues are still expected to be higher in the current budget than the past. This fact is demonstrated in the table below.
General Fund State Revenue Growth (Dollars in Millions)
Source: Washington State Economic and Revenue Forecast Council
This does not mean the state isn't facing a real problem. The reduced revenue growth for the current budget means that the state is now facing a potential $413 million cash deficit due to the spending levels adopted (not including budget reserve account).
If at any time during the fiscal period the governor projects a cash deficit in a particular fund or account as defined by RCW 43.88.050, the governor shall make across-the-board reductions in allotments for that particular fund or account so as to prevent a cash deficit, unless the legislature has directed the liquidation of the cash deficit over one or more fiscal periods . . .
With today's economic news, now is the time for Washingtonians to become actively involved and offer their recommendations to state officials on how to build a sustainable core function focused budget.
In a message few in D.C. thought they'd hear, South Carolina Governor Mark Sanford is telling the federal government NOT to bail out the states. Here is an excerpt from Sanford's Wall Street Journal op-ed:
I find myself in a lonely position. While many states and local governments are lining up for a bailout from Congress, I went to Washington recently to oppose such bailouts. I may be the only governor to do so.
But I suspect I'm not entirely alone, as there are a lot of taxpayers who aren't pleased with Christmas coming early for politicians. And I hope these taxpayers make their voices heard before Democrats load up the next bailout train for states with budget deficits . . .
In 2008 bailouts became the first resort. Over the past year the federal government has committed itself to $2.3 trillion (including the tax rebate "stimulus" checks of last February) to "improve" the economy. I don't see how another $150 billion now will make a difference in a global slowdown. We've already unloaded truckloads of sugar in a vain attempt to sweeten a lake. Tossing in a Twinkie will not make the difference.
However, there is something Congress can do: free states from federal mandates. South Carolina will spend about $425 million next year meeting federal unfunded mandates. The increase in the minimum wage alone will cost the state $2.6 million and meeting Homeland Security's REAL ID requirements will cost $8.9 million.
Jason Mercier is the Director of the Center for Government Reform at Washington Policy Center and is based in the Tri-Cities. He serves on the boards of the Washington Coalition for Open Government and CandidateVerification, and was an advisor to the 2002 Washington State Tax Structure Committee. Jason is an ex-officio for the Tri-City Regional Chamber of Commerce. In June 2010, former Governor Gregoire appointed Jason as WPC’s representative on her Fiscal Responsibility and Reform Panel.