Pennsylvania Spending Transparency 2.0: Online Tools for Better Government Pennsylvania Spending Transparency 2.0: Online Tools for Better Government Fall 2010 Kari Wohlschlegel and Elizabeth Ridlington, Frontier Group Megan DeSmedt, PennPIRG Education Fund Phineas Baxandall, Ph.D., U.S. PIRG Education Fund Acknowledgments The authors would like to thank Steve Herzenberg, Executive Director of the Keystone Research Center for his review of this report. Phineas Baxandall of U.S. PIRG Educa- tion Fund shared his expertise and advice at numerous points during the development and writing of this report. Clair Embry provided valuable research assistance. Thanks to Tony Dutzik and Travis Madsen of Frontier Group for editorial assistance. This report is made possible with funding from the Ford Foundation. The opinions expressed in this report are those of the authors and do not necessarily reflect the views of our funders or those who provided editorial review. Any factual errors are strictly the responsibility of the authors. © 2010 PennPIRG Education Fund With public debate around important issues often dominated by special interests pursuing their own narrow agendas, PennPIRG Education Fund offers an indepen- dent voice that works on behalf of the public interest. PennPIRG Education Fund, a 501(c)(3) organization, works to protect consumers and promote good government. We investigate problems, craft solutions, educate the public, and offer Pennsylva- nians meaningful opportunities for civic participation. Frontier Group conducts independent research and policy analysis to support a clean- er, healthier and more democratic society. Our mission is to inject accurate informa- tion and compelling ideas into public policy debates at the local, state and federal lev- els. For more information about Frontier Group, please visit www.frontiergroup.org. Cover photo: iStockPhoto Layout: Alec Meltzer, meltzerdesign.net Table Of Contents Executive Summary ...............................................................1 Introduction .........................................................................4 A Growing Movement: State Governments Are Embracing Web-Based Spending Transparency .........................6 Transparency 2.0 Initiatives Enjoy Broad, Bipartisan Support ................................................ 7 Transparency 2.0 Is an Effective, Low-Cost Tool ....................................................................... 8 Leading States Have Developed Best Practices ............................ 10 Comprehensive .............................................................................................................................11 One-Stop .......................................................................................................................................15 One-Click Searchable ..................................................................................................................16 Pennsylvania’s Transparency Web Sites: A Good Foundation That the State Should Build On....................... 17 Accessing Contracts: The Contracts e-Library .........................................................................18 Accessing Subsidies: Investment Tracker ..................................................................................19 Needed Improvements ................................................................................................................20 Conclusion ......................................................................... 26 Appendix: States With Transparency Web Sites ........................... 27 Endnotes ........................................................................... 29 Executive Summary The ability to see how government uses the ➤ Bipartisan efforts – Transparency legislation public purse is fundamental to democracy. has been championed by legislators both Spending transparency checks corruption, Republican and Democratic. In 2009, the bolsters public confidence in government, and Pennsylvania House unanimously passed promotes fiscal responsibility. legislation sponsored by a Democrat to cre- ate an enhanced transparency Web site (pro- Pennsylvania’s new online government viding more informa tion than the Contracts spending Web site – the Contracts e-Library e-Library). A similar bill, sponsored by a – represents a good first step toward greater Republican, passed in the Senate. In 2008, transparency. But Pennsylvania has a long federal legislation to strengthen Web-based way to go to match the spending transparen- spending transparency was co-sponsored in cy efforts of leading states in the movement the U.S. Senate by presidential rivals John toward “Transparency 2.0” – a new standard McCain (R-AZ) and Barack Obama (D-IL). of comprehensive, one-stop, one-click budget accountability and accessibility. ➤ Public support – Republicans, independents and Democrats all support enhanced gov- With the state in the midst of a budget crisis, ernment transparency by wide margins. it’s especially important for Pennsylvanians When asked about the role of transparency to have easy access to information about the in the federal economic recovery package of state’s expenditures. Pennsylvania should fill in early 2009, fully 75 percent of American vot- the gaps in government reporting and bring its ers said creating state level Web sites to track online transparency up to the level of leading funds was “important,” and 34 percent said states. Doing so will create savings and will al- it was “very important.” low Pennsylvanians to hold decision makers in Harrisburg more accountable. Transparency 2.0 saves money and bolsters citizen confidence. The movement toward Transparency 2.0 is broad, bipartisan, and popular. ➤ Increased civic engagement – Americans are eager to use transparency Web sites. Hous- ➤ A nationwide wave – Legislation and ex- ton officials report improved public confi- ecutive orders in 32 states have given resi- dence after the launch of their transparency dents access to online databases of detailed Web site. The Missouri Accountability Por- government expenditures, and the federal tal received more than 13 million hits in the government has launched similar initiatives. 18 months after its launch. The vast majority of these states have acted over just the last three years. 1 Pennsylvania Spending Transparency 2.0 PennPIRG Education Fund ➤ Low cost – Spending transparency Web sites with other public purchasers on good deals; can be inexpensive to create and maintain. avoiding wasteful duplication of bidding and The federal transparency Web site, which contracting procedures through centralized allows Americans to search over $2 trillion processes; better enforcement of favorable in federal yearly spending, cost less than $1 pricing and contract terms; and focusing million to create. Missouri’s Web site, which cost-cutting in areas where greater resources allows its residents to search over $20 bil- are spent. lion in state annual spending and is updated daily, was created with already-existing staff Pennsylvania’s transparency Web site puts and appropriations. the state on the right track, but still has major deficiencies. ➤ Big savings – Transparency Web sites can save millions through more efficient gov- ➤ Good first step into Transparency 2.0 –Penn - ernment operations, fewer information re- sylvania’s new Contracts e-Library Web site quests, more competitive contracting bids, gives residents access to crucial government and lower risk of fraud. In the two years accountability information. State contracts following the launch of its transparency are keyword-searchable by department, website, the Texas Comptroller reported supplier name, and cost, making it easy $4.8 million in savings from more efficient for Pennsylvanians to find out information government administration. Utah estimates about how government is spending taxpay- millions in savings from reduced informa- ers’ money. tion requests. The largest savings may come from the deterrence of waste or abuse of ➤ An effective and cheap tool – The Contracts public funds due to enhanced public scru- e-Library Web site cost $457,000 to create, tiny – savings that are impossible to quantify and lessons from other states indicate that but likely significant. Pennsylvania will recoup this cost through fewer information requests and more effi- ➤ Better-targeted expenditures – Transparency cient government spending. budget portals allow states to track how well subsidies and tax incentives deliver results. ➤ Information on corporate tax breaks and sub- Funds from underperforming projects and sidies is incomplete – The state’s Investment programs can be reinvested in more success- Tracker Web site provides incomplete infor- ful programs. By tracking the performance mation on the millions of dollars that Penn- of state subsidies, Minnesota and Illinois sylvania spends each year on corporate tax have both been able to recapture money breaks and subsidies. Data that would allow from numerous projects that failed to de- citizens and officials to evaluate the effec- liver promised results. tiveness of these subsidies are missing. ➤ Better coordination of government contracts – ➤ Contracting data are incomplete – Contracts The Massachusetts’ State Purchasing Agent are missing from the Contracts e-Library identifies four sources of savings for state because the state agencies determine which procurement officers: sharing information contracts are subject to public disclosure. 2 Pennsylvania Spending