December 16, 2009

RALEIGH — Government agencies that shine light on their work use resources more wisely, find potential budget savings more easily, and give taxpayers more reasons to trust them. The John Locke Foundation’s top budget analyst reaches that conclusion in a new Policy Report.

Click here to view and here to listen to Joseph Coletti discussing this Policy Report.

“Government at all levels needs to be more open and accountable to voters and taxpayers,” said Joseph Coletti, JLF Fiscal and Health Care Policy Analyst. “Greater accountability depends in part on being more open about how government spends its money and what it gets for that spending. Accountability also depends on an open process of developing laws and regulations.”

Coletti is releasing his new report at the same time as the John Locke Foundation unveils a new pocket guide to government transparency. The guide offers officials and taxpayers a concise, easy-to-use tool promoting the benefits of open government.

Recent North Carolina history is “rife” with examples of problems linked to government business conducted behind closed doors, Coletti said. “From the recent controversy surrounding former Gov. Mike Easley’s financial dealings to the scandal associated with the unexpected hole in the State Health Plan’s budget, this state has suffered when politicians have tried to hide the public’s business from scrutiny.”

Coletti’s report focuses on three aspects of open government: financial, process, and regulatory transparency.

“Financial transparency means making budgets, contracts, salaries, and check registers available online in forms that are searchable and easy to understand,” he explained. “Process transparency means opening the closed doors elected officials try to hide behind when drafting laws. Regulatory transparency means making the proceedings of nonelected bodies as open as those of the legislature, county commissions, and town councils.”

The Web site already focuses attention on financial transparency, Coletti said. “That site grades state and local government agencies and public school systems on the amount of critical information available to citizens online,” he said. “The site issues grades to encourage agencies to put more information online. Local governments generally have been very receptive.”

Government leaders need to focus on more than just making information available, Coletti said. “Information is accessible and useful only if citizens can understand it,” he said. “Elected and unelected officials need to change their approach to information. It is not simply about responding to citizen requests for information. A commitment to transparency involves a commitment to present information online in a way that can be understood easily.”

The private sector offers some valuable examples, Coletti said. “Compare the financial statements for the $40 billion enterprise of state government with those of the Target Corporation, which has $65 billion in revenue,” he said. “The private-sector firm makes annual financial reports available in searchable PDF files, while the state’s financial statements are scanned PDFs that cannot be searched or analyzed.”

“The private firm shows at least two years’ worth of financial information, compared to the state’s focus only on the current year,” Coletti added. “Private companies operate transparently to meet both government regulations and investor demands. The government itself faces neither market nor regulatory pressures.”

Financial transparency is critical, Coletti said. “Governments operate on money,” he said. “If it is difficult to understand how that money is spent and to what end, there is no way to control it.”

When governments make financial information clear, taxpayers and elected officials benefit, Coletti said. “Elected officials trying to provide essential services in an uncertain economy depend on the insights of their professional staff, but they can also benefit from the knowledge of taxpayers with particular expertise and vendors who can provide products and services in more cost-effective ways,” he said. “Financial transparency helps those taxpayers and vendors participate in the government process more easily.”

Several simple steps would help improve what Coletti calls “process transparency.” “Putting bills online 72 hours before debate and voting begin would leave fewer surprises in legislation,” he said. “Five-year fiscal projections for state and local budgets would also make clear the impacts of program changes over time. Governments also should take further steps to publicize their meetings beforehand, record their proceedings, and make minutes or archived recordings available online.”

Appointed regulatory boards need much more sunshine, Coletti said. “Proposed regulations should be easier to find and understand,” he said. “Governments also need more independent reviews of a program’s effectiveness. The state auditor, the General Assembly’s Program Evaluation Division, or a nongovernmental entity should review agencies and programs regularly. The reviews should cover not just how well an agency or program accomplishes its mission, but also whether the mission is appropriate for government.”

Elected leaders need to do more than talk about transparency, Coletti said. “Governments have been seeking ways to adopt or advertise their efforts at open government, sunshine, and transparency,” he said. “They don’t always follow through on that talk. Following the suggestions in this report would lead to real improvements that would help government regain voters’ trust.”

Joseph Coletti’s Policy Report, “Trust But Verify: Open government is better government,” is available at the JLF Web site. For more information, please contact Coletti at (919) 828-3876 or [email protected]. To arrange an interview, contact Mitch Kokai at (919) 306-8736 or [email protected].