The following editorial appeared in the October 2015 print edition of Carolina Journal:
One of the least costly but most valuable provisions in the recently enacted state budget could transform the way the citizens of North Carolina understand state and local government: the section requiring all state, county, and municipal agencies, along with local education authorities, to post online their budgets and spending in a user-friendly, easy-to-search manner.
To satisfy the law, agencies must format data in ways that can be downloaded and analyzed easily by citizens and decision makers. The information must include budgeted amounts and actual spending by each state agency or local entity, as well as information on receipts and expenditures from and to all sources, including vendor payments, updated monthly.
When this portal goes live, advocates of government transparency can claim a major victory. Putting all spending information in the hands of the public will help us understand how government works, make it more difficult to conceal questionable spending schemes, and allow meaningful comparisons among different units of government.
Two pathbreaking John Locke Foundation reports on economic development incentives highlight the need for that information. The first, released in July, showed that between the 2009 and 2014 budget years, North Carolina counties entered 776 incentive deals, committing $284 million in taxpayer subsidies to private businesses. The second, published in September, concluded that over the same period, the state’s largest cities (the 13 with populations of 70,000 or more) entered 240 contracts worth $65 million.
The mega-businesses enjoying taxpayer largess included Apple, Bridgestone-Firestone, Caterpillar, Great Wolf Lodge, Ralph Lauren, Lowe’s Home Improvement, and Malt-O-Meal. And, as you probably know, both the General Assembly and local governments have been eager to open the fiscal floodgates (and the taxpayers’ wallets) to attract an automobile manufacturer to North Carolina.
The JLF reports marked the first time any government organization, trade association, special-interest group, or nonprofit organization had collected or published economic development data for N.C. cities or counties.
The lead author of both studies, JLF director of fiscal policy studies Sarah Curry, found that local governments are not required to use any kind of uniform or even comprehensible reporting requirements for their economic development projects, making it very difficult for researchers — and nearly impossible for the public at large — to track spending on tax abatements and other subsidies to businesses.
The lack of a uniform reporting requirement also makes it challenging to compare incentive deals from one city to another or across county lines, since each government unit can choose how to report or obfuscate taxpayer spending on those projects.
Correcting that problem should be a top priority for the General Assembly’s 2016 short session.
The new budget requires the websites to be up and running by April 1, 2016. The state allocated $814,000 to develop the budget transparency portal — much less than the $6 million set aside by the House and the $16 million promised by the Senate in their original spending plans.
Even the lower amount should be money well spent.