I’m pleased to report progress on financial transparency, an issue that I have made a high priority in this session. Click here for background.
In April, the House, with leadership support, passed two big steps in the right direction — a website that should make it much easier to access spending information and a law change making available information about tax credits awarded to businesses.
I wasn’t sure where the Senate would be on the issue. The measures were not included in the initial draft of the Senate budget. But I’m delighted to report that the Senate, during budget debate, approved roughly the same measures, making their final passage highly likely.
Unfinished business on this issue involves the management of expenditures in the legislative accounts. We need to make changes to assure public competition for contracts for major legislative expenditures like technology. I had offered amendments in this area, but agreed in final negotiations around the House budget that it made sense to address legislative spending procedures in the legislative rules debate which will occur at the start of the next session. The measures we adopted do make progress on legislative spending procedures, because they will require disclosure of purchase orders in legislative accounts.
See the press release below from the Massachusetts Public Interest Research Group for more detail.
Transparency advocates praised last night’s vote by the Massachusetts Senate approving two reforms which will set a new standard for government transparency and accountability.
With unanimous votes during its budget debate, the Senate created a searchable new state budget website, making transparent much of state spending and revenue sources for all state agencies, including quasi-publics. The website will allow the public, including local officials, businesses, lawmakers, citizens, and others to see where the state is investing our tax dollars.
The second reform will provide greater transparency of transferable* or refundable tax credit programs granted to businesses in the Commonwealth. The language requires agencies that administer these programs to provide the following information to the Commissioner of Administration and Finance starting in 2011: 1) the identity of the recipient of the tax credit; 2) the amount of the credit provided; 3) the number of jobs created as a result; and 4) relevant, specified information about how the recipients met the objectives of the credit program. This information would be made available on the state budget and spending website.
Massachusetts spends hundreds of millions of dollars every year in tax credits to businesses for many objectives including economic development, preservation of historic buildings, and the reclamation of brownfields. Unmeasured, the performance of these tax breaks remains unmanaged and unaccountable.
According to a recent state by state report, Following the Money, released by MASSPIRG earlier this month, Massachusetts is lagging behind 32 other states in their transparency of detailed spending information. “Passage of these transparency and accountability reforms would move Massachusetts from a lagging state to a leading state,” said Deirdre Cummings, Legislative Director for MASSPIRG, “Just like David Ortiz, the Senate hit one out of the park last night.”
“With the passage of these amendments, Massachusetts citizens will have a powerful new lens with which to view their government in action,” said Pam Wilmot, Executive Director of Common Cause Massachusetts. “Check-book level detail of state expenditures, including information about key tax credits, is critical to an informed citizenry. Good for the Senate and the House for providing this new level of transparency to the public.”
“Taxpayers deserve to know what kind of return on investment they are getting, especially when so many important programs are being cut across the state,” stated Senator Karen Spilka (Ashland), the Senate Chair of the Joint Committee on Economic Development and Emerging Technologies. “Greater transparency and oversight is vital to the public trust, and is increasingly possible with new technology. At the same time, we need to balance the needs of the businesses in the state, so that they continue to invest and grow here. This amendment continues the Senate’s work in increased transparency and oversight while striking that balance.”
The groups also praised the leadership of Senator Benjamin Downing (Pittsfield), Chairman of the Committee on Revenue, who helped form a coalition of colleagues in the Senate to successfully advance the transparency reforms in the Senate’s FY2011 budget.
“The amendments adopted by the Senate will significantly move the state forward in providing taxpayers with a more transparent and accountable government,” said Senator Cynthia Stone Creem (Newton). “The ability to see how public monies are spent and received is fundamental to our democratic system. By making access to information easier for our citizens we can expect to not only operate more efficiently but also to increase public confidence in government.”
“At a time when we are making massive cuts in every area of our budget, it’s more important than ever that we examine where every single public dollar is going, and what impact it is having. These new transparency tools will promote efficiency, discourage waste, provide a check on corruption, and give the public valuable insight into how their dollars are being spent,” said Senator Jamie Eldridge (Acton).
“These new rules will go a long way toward rebuilding the public’s confidence in government,” said Yawu Miller, Project Director for One Massachusetts. “People need to be able to see that revenues are being raised in a manner that’s fair and that public resources are being spent in a manner that’s wise.”
The reforms are now included in both the House and the Senate’s FY2011 Budget. They will then be finalized in a conference committee which will work out all differences between the House and Senate versions of the budget. The new searchable database and website provisions are virtually identical in the House and Senate budgets. The tax credit transparency reform is slightly different, with the Senate including additional reporting requirements. Advocates will be pushing to retain these requirements in conference.