Tax And Budget News

This year many U.S. states have launched what they call “Google Government” by using the Internet to make accessible detailed information about where tax dollars go and who gets government contracts and subsidies. A new report highlights how far California lags behind this national trend.

In a growing number of other states, searchable public databases provide easy access to information about government expenditures by agency, category, or contractor. With a few clicks, taxpayers and journalists in some states can see which contractors lobbied or gave in campaign contributions. “Transparency is necessary to keep a watchful eye on the public purse. We can do better than Mississippi,” argued Emily Rusch of the California Public Interest Research Group (CALPIRG) which supports public transparency. She added, “You can’t make smart decisions about taxpayer spending and hold elected officials accountable without this kind of information.” 

The report, released today by the Washington D.C.-based think tank, Good Jobs First, found that California provides less information and access than thirty other states. The state fails to provide any information about financial and tax subsidies given to private entities. Illinois received the top ranking on subsidy disclosure, providing an online database searchable by vendor with information about promised and actual job benefits. Companies that fail to deliver promised benefits must return the subsidies they receive. None of these policies exist in California for programs such as the Enterprise Zone program.

Only nine states provide less public information about public contracts to private vendors, a category in which the GoldenState was tied with Mississippi. Overall, California received a grade of “F” and was tied with Idaho, Kentucky, Louisiana, and Mississippi. 

"We found that many states have a long way to go, especially with regard to economic development subsidies, in fully disclosing their interactions with the private sector," said Philip Mattera, research director of Good Jobs First and principal author of the report. Payments to private contractors accounts for over 40 percent of state and local government spending across the nation, according to U.S. Department of Commerce reports. Company-specific subsidies and tax incentives have also grown in recent years.

“It’s really unfortunate that in the past both Governor Schwarzenegger and Governor Davis have vetoed legislation to create greater accountability to taxpayers for their subsidy dollars,” said Lenny Goldberg, Executive Director of the California Tax Reform Association, referring to SB 103 (Cedillo), vetoed this year, and AB 1220 (Romero), vetoed in 2000.

“Especially in light of the difficult year ahead for California’s state budget,” added Ms. Rusch, “we owe it to ourselves to provide full information about where the money goes.” 

The full report, The State of State Disclosure, is found at http://www.goodjobsfirst.org/