New Report: Arizona Receives a ‘B’ in Annual Report on Government Spending Transparency

Arizona PIRG Education Fund

According to a new report, Arizona performs well when it comes to government spending transparency, but has room for improvement. Arizona received a ‘B’ in the fifth annual Arizona PIRG Education Fund spending transparency report, Following the Money 2014: How the States Rank on Providing Online Access to Government Spending Data.

“Arizona continues to do a relatively good job when it comes to being transparent about where our public money is going. The state’s OpenBooks transparency website provides citizens with the information they need to hold elected officials accountable in an easily accessible, online format,” said Serena Unrein, Public Interest Advocate with the Arizona PIRG Education Fund. “One area where Arizona has big room to improve is in the transparency of economic development subsidies.”

“Transparency is critical because not only do taxpayers deserve to know how their money is being spent, but also because increased sunshine ensures that spending decisions are efficient and reasonable,” said State Representative Darin Mitchell.

Based on an inventory of the content and ease-of-use of states’ transparency websites, Following the Money 2014 assigns each state a grade of ‘A’ to ‘F.’ This year Arizona earned a ‘B’ because its checkbook is searchable, easy to access, and contains detailed information on a wide range of state spending. Arizona falls short of being a leading state because it does not provide checkbook-level information for all of its top economic development subsidy programs. State law currently prohibits disclosing the recipients of corporate income tax credits.

Six states provide public access to checkbook-level data on the subsidy recipients for each of the state’s most important economic development programs, allowing citizens and public officials to hold subsidy recipients accountable by listing the public benefits that specific companies were expected to provide and showing the benefits they actually delivered.

Legislation introduced this year by Rep. Mitchell would have made economic development tax credits more transparent by requiring the Department of Revenue to annually report information on these tax credits; House Bill 2586 was passed 57-0 by the Arizona House of Representatives, but was defeated in the Senate Commerce committee. The State of Arizona spent nearly $100M of taxpayer money on corporate tax credits intended to stimulate economic development in 2011, but the public received no information about the results of these programs or which companies received the tax credits.

“Taxpayers have a right to know who is receiving these credits and in what amount so we can determine if it is a good investment for Arizona,” said Scot Mussi, Executive Director of the Arizona Free Enterprise Club. “At a cost of $100 million dollars a year, a little sunshine wouldn’t be such a bad idea.”

Officials from Arizona and 44 other states provided the researchers with feedback on their initial evaluation of state transparency websites. The leading states with the most comprehensive transparency websites are Indiana, Florida, Oregon, Texas, Massachusetts, Iowa, Vermont, and Wisconsin.

States that have created or improved their online transparency have typically done so with little upfront cost. In fact, top-flight transparency websites can save money for taxpayers, while also restoring public confidence in government and preventing misspending and pay-to-play contracts.

State spending transparency is a non-partisan issue. The report compared transparency scores with a variety of measures of which party rules the state legislative, or sits in the Governor’s office, or how public opinion tilts in the states. Neither Republican nor Democratic states tended to have higher levels of spending disclosure.

 “To be an ‘A’ state when it comes to spending transparency, Arizona will need to show the public how their tax money is being spent on economic development subsidies and do a better job of reporting on the results of those programs,” concluded Unrein.

The state’s transparency website can be accessed at: http://openbooks.az.gov.

The report can be downloaded at http://arizonapirgedfund.org/reports/azf/following-money-2014.