How Does Minnesota Compare - Government Transparency Edition

Minnesota's rankings on a host of transparency meaures deveoped by national organizations. January-February 2012.

How Does Minnesota Compare – Government Transparency Edition

The lasting impact of the American Recovery and Reinvestment act — a.k.a, the federal stimulus — is still hotly debated. But according to a recent article in Governing magazine, one outcome is without dispute: “the legislation has done more to promote government transparency across all levels of government than any other piece of legislation in recent memory.”

A steadily growing interest in “open government” initiatives across the country has been turbo charged by the lessons learned and technical know-how state governments developed implementing the heightened federal reporting requirements. New and expanded transparency portals with detailed information on government spending have sprung up among state and local governments across the country. Observers believe these initiatives are creating the foundation for what have been described as “transparency 2.0” initiatives that may eventually link performance metrics with spending data.

Minnesota prides itself on its long history and tradition of accountable and transparent government. It’s worth taking a look at what is happening around the nation and see if Minnesota is keeping up.

In the Eye of the Beholder

One of the major challenges of critiquing government transparency is that the concept can mean many different things to people –data availability, disclosure, use of various practices and processes, etc. A recent national study by the Institute of Government and Public Affairs at the University of Illinois examined the variety of ways transparency has been defined and measured by national organizations that have made the issue a cornerstone of their mission. The accompanying table highlights the findings of this report and Minnesota’s performance.

Table 1

Definitions and Measurement of Transparency by National Organizations

Transparency Issue/Measure Description Developed By Minnesota Grade/Rank
Budget Process, Contents, and Disclosure Existence of eight elements comprising the budget process and accompanying documentation. (2011) IGPA's recreation of indices created by academic researchers, based on data from the National Association of State Budget Officers 62.5% (5 out of 8)
Completeness of online budget information Website access to 10 types of government financial and budget information. (2011) Sunshine Review Grade of B-
Disclosure of private interest involvement in government budgets and spending Online access to information on three areas: economic development subsidies, procurement contracts, lobbying activities. (2007) Good Jobs First Grade of F
Online access to government spending data 12 measures reflecting the completeness of state spending disclosure and the ability to access it online. US PIRG Grade of B
Timeliness of disclosure Time lag between end of state fiscal year to release of state CAFR. Truth in Accounting "Timely" (best categorization)
Transparency of Fund Accounting Four measures reflecting the ability to evaluate use of general and special budgetary funds to obtain a complete and clear fiscal picture of state spending activities. IGPA Rankings range from 5th to 33rd in nation
  • Transparency in State Budgets: A Search for Best Practices, University of Illinois Institute of Government and Public Affairs, September 2011.

Our review of the criteria and methodologies employed in these reports suggest that the findings and resulting scores are clearly open to some debate. Nevertheless, Minnesota’s middling performance across the board is cause for consideration.

A closer look reveals some areas where Minnesota is lagging behind other state counterparts:

  • Performance measures — the lack of meaningful metrics and data (or lack of easily accessible data) on what results are being achieved by state program spending. Current legislative interest in instituting performance or outcome based budgeting practices would clearly jumpstart improvement in this area.
  • Completeness and user friendliness of the Minnesota “open book” website – The “Transparency and Accountability Project for Minnesota” (TAPmn) is a web based reporting tool developed by Minnesota Management and Budget to make state spending more accessible and understandable. We have found the tool itself to be rather clumsy, unintuitive, and potentially confusing for users – a perspective apparently shared within MMB as improvements are being made to it at this time. Moreover, the scope of the tool is limited to payments to individuals, organizations, vendors, and contractors and leaves out internal cost structures.
  • Inclusion of local government information – in several states platforms have been created allowing local governments to upload their own budget information to the state portal thus creating a one stop information source for citizens. Others require that data be submitted to the state or posted on local government websites and several provide templates or guides. In Minnesota, the only state level portal for local government information in Minnesota resides with the State Auditor and is based on data that is two years old.

Local governments in Minnesota fare little better in their transparency evaluations. The Sunshine Review examined all 87 Minnesota counties based on their ten-point criteria. Forty-two counties received a grade of D- or F heavily influenced by the absence of budget information. Minnesota’s bright spot is Carver County which received a perfect A+ rating in contrast with the B and C grades for the counties in the rest of the metro area. A handful of Minnesota city governments have also been evaluated by “sunshine reviews” with Bloomington’s grade of “B” leading the way.

Perhaps the most interesting development in local government transparency has occurred in Michigan. Beginning in FY 2012, that state has replaced part of its version of general purpose local aid with a new initiative called the Economic Vitality Incentive Program (EVIP). Under the EVIP state general purpose aids are conditioned on the establishment of a comprehensive program by local government to foster greater transparency and citizen engagement. Three accountability-related requirements of the EVIP are on-line budget information, a local government performance dashboard in which governments create “personalized” performance measures and track them, and a citizens guide. In addition, the program also requires modifications to government employee compensation design and proof of efforts to develop or expand intergovernmental collaboration efforts in service delivery.

Data versus Understanding

If there is a potential pitfall in these efforts it is that the heavy emphasis on data access can unintentionally undercut what we believe to be the primary objective of such efforts: enhancing the ability of citizens to assemble the story of their local governments, examine trends, and make informed judgments about the use of taxpayer dollars. A flood of new data and information can generate same result as information scarcity if the challenge of digesting, assembling and analyzing all this raw information is too much to expect citizens to process. In that respect, a sophisticated web portal allowing deep data mining is no better than an intimidating 200 page budget document already available to the general public.

The difference between data and understanding was the motivation behind HF 1911/SF1741, which itself arose out of MTA’s work with NAIOP Minnesota to help their members understand the reasons for property tax changes. The legislation would simply require local governments to report budgets and budget trends by expenditure type as well as program area. Based on our experiences, the reporting requirement is largely an aggregation of commonly reported departmental information with some additional detail. Compared to other national initiatives it is humble in both scope and cost. Yet it is an essential building block to foster greater understanding changing property taxes.

As the accompanying “from the director” column notes the tension over taxes and local government spending are only expected to escalate in the future. Signs of this stress are already evident in the proposals this year for constitutional tax and spending limitations and local property tax levy limits. Functionally these types of proposals are more than fiscal straitjackets, they are a white flag of surrender to the idea that accountable, efficient government can best be achieved through responsible citizen involvement and oversight. Governments at all levels need to invest in transparency because whatever challenges and discomfort are created by greater visibility, the alternative is much worse.