In The Public Interest: States Must Make It Easy to Track Spending on Contracts and Subsidies

03/16/2011 03:19 pm ET | Updated May 25, 2011

While some politicians try to cast state budget problems as all about public pensions and salaries, most government spending actually flows to other sorts of things. In many if not most public agencies the spending takes place largely through private contractors. Much other spending takes place through tax credits and quasi-public agencies that aren't even in the budget.

In the most comprehensive study of its kind, researchers at the United States Public Interest Research Group graded all 50 states on how well they provide online access to information about a broad swathe of government spending. States were given "A" to "F" grades based on the characteristics of the online transparency systems they have created to provide information on contracts, subsidies and spending at quasi-public agencies.

The good news is that state governments across the country are becoming far more transparent about where the money goes, but even the leading states still have a lot of room for improvement. Among the findings in the study:

  • Six states that had no central transparency website last year launched such sites by January 2011. These were Arizona, Indiana, Massachusetts, Michigan, New Hampshire, and Wisconsin.
  • Nine states garnered "A" or "B" grades. These leading states - Kentucky, Texas, Indiana, Arizona, Louisiana, Massachusetts, North Carolina, Ohio, and Oregon - provide information that is highly searchable, and include detailed data about government contracts, tax subsidies and grants to businesses.
  • Thirty-one "emerging" states received a "C" and "D" grade.
  • Ten "lagging" states received an "F" and don't provide checkbook-level information about government spending.
  • Maine is the only state in the nation without a publicly accessible transparency website.

The report, Following The Money 2011: How The 50 States Rate In Providing Online Access To Government Spending Data, is the second annual study on state spending transparency.

Researchers reached out to public officials responsible for providing transparency information and received substantive feedback from officials in 39 states.

"Red" states and "Blue" states have both embraced spending transparency. The ranks of leading states are split roughly equally between those that voted Democratic in the last presidential election and those that voted Republican. In fact, the average score of the Obama-voting states is almost exactly the same as the score among McCain-voting states.

Since last year, there has been remarkable progress with new states providing online access to checkbook-level information on government spending. Several states pioneered new tools to further expand citizens' access to spending information. The best state transparency tools were highly searchable, engaged citizens, and included detailed information about contracts, tax expenditures, economic development incentives as well as spending by quasi-public agencies and local government. States that have created or improved their online transparency have typically done so with little upfront cost and many have shown substantial cost savings as a result.

Given the current severity of proposed state budget cuts, certain projects shouldn't be put on the chopping blog while others escape scrutiny. In order to restore confidence in government and ensure that taxpayers get maximum "bang for their buck," citizens must be able to follow the money.

Click here to read Following the Money's executive summary and to download a copy of the report, and click here to see an interactive web tool displaying the report's findings.