Local Government Disclosure Requirements: Weighing Redundancy/ Emphasizing Effi ciency By Natalie Davila, Mike Klemens and Kara Moretto KDM Consulting, Inc. March 15, 2016 About the Authors Michael D. Klemens Manufacturing Center as well as the Director KDM Consulting President of Economic Research for the City of Chicago’s Department of Planning and Development. She Mike worked in the Director’s Offi ce at the is currently an adjunct faculty member at DePaul Illinois Department of Revenue for 20 years in an University. Natalie holds a Bachelor’s degree from assortment of tax policy related roles, re ring in Queen’s University in Belfast, Northern Ireland, a 2012 as Manager of Policy and Communica ons Master’s degree in Applied Economics from the where he oversaw the development of the University of Michigan, and a Ph.D. in Public Policy department’s web presence. Analysis from the University of Illinois in Chicago. In 2012 Mike established KDM Consul ng, which Kara Moretto works extensively with the Taxpayers’ Federa on of KDM Consulting Associate Illinois. His areas of tax exper se include property tax, property and sales tax exemp ons and taxes Kara has over 23 years of progressive tax that the state administers for local governments, administra on experience including a s nt as head together with a broad general knowledge of the of the Offi ce of Local Government Services. She 75+ taxes and programs administered by the has exper se in Illinois specifi c legisla ve research department. Mike holds a Bachelor’s degree from and extensive knowledge of the Illinois property Dartmouth College and a Master’s degree from tax system. Sangamon State University. In her capacity as Illinois’ property tax administrator, Dr. Natalie Davila Kara had direct oversight of annual property tax KDM Consulting Economist programs including supervision of the state’s CAMA system and cost schedule development, sales ra o Natalie has more than 20 years of experience in the studies, county equaliza on factors, homestead formula on and execu on of data-driven tax and exemp ons, the property tax extension limita on economic development research, strategies and law and other rate limits, and interpre ng statutes. policies. For the past two years she has worked as She made extensive use of the department’s website a consultant on state and local tax administra on, to communicate with local offi cials and the public. policy and economic development projects. Kara holds Bachelor of Science degree in Psychology from the University of Illinois-Springfi eld. Natalie was the Research Director at the Illinois Department of Revenue from 2003 to 2013, where KDM Consulting Inc. she championed use of the Internet to distribute Department research and policy analysis. Natalie KDM Consul ng conducts data driven tax policy has also held the positon of Director of Economic analysis, economic research and fi scal policy Evalua on and Market Research for the Chicago analysis. More detail at www.taxpolicyissues.com. Local Government Disclosure Requirements Executive Summary This report was commissioned by a consor um of local government associa ons to analyze pos ng, repor ng and publica on requirements for Illinois local governments and to examine the concept proposed in various bills before the General Assembly that would impose redundant Internet pos ng requirements on Illinois local governments. The study fi nds that: An independent review of Illinois local Many of the current proposals are government websites by an organiza on redundant. Much of the informa on that promotes transparency in proposed to be posted on local government websites, Sunshine Review, governments’ websites is already available gave Illinois local governments high marks on the Internet. for their websites. Much of the exis ng informa on available Illinois state government already imposes on the Internet was done at local taxpayer a host of repor ng requirements on expense. Redundant requirements would be local governments. We iden fi ed 571 ineffi cient and a waste of taxpayer’s money. statutory requirements to disclose via various means 763 separate pieces No evidence exists of a empts to iden fy of informa on. (We refer to these as gaps in current informa on available or “transparency-related” no fi ca ons.) comple on of cost-benefi t analyses to assure that taxpayers’ money is being More than half the exis ng requirements spent effi ciently. involve publishing a “legal no ce” in newspapers, where circula on and rereadershipadershipp iiss ddedeclining.clliiniing.g Local Government Disclosure Requirements Page 1 Introduction This report was commissioned by a consor um of local government associa ons to analyze pos ng, repor ng and publica on requirements for Illinois local governments. It was undertaken to provide context for a number of bills introduced in the General Assembly that would impose signifi cant addi onal Internet pos ng requirements on local governments. The study looks at a myriad of “transparency-related” repor ng requirements and details the signifi cant amount of informa on already made available to Illinoisans. Findings ILLINOIS LOCAL GOVERNMENTS were, in alphabe cal order, California, Illinois, GET HIGH MARKS FOR INTERNET Maryland, Pennsylvania and Washington. Below are the results for Illinois in 2013. TRANSPARENCY Illinois local Overall State County City School District governments have Exceeds embraced the Internet > above average > above average above average above average as an eff ec ve and Expecta ons effi cient way to get Source: hƩ p://sunshinereview.org/images/0/06/2013_Transparency_Report_Card.pdf informa on to their ci zens. Illinois When compared to other states, school districts in local governments provide a signifi cant amount only three states received a higher grade than those of informa on, both on the Internet and via other in Illinois. means, to keep their ci zens informed about upcoming mee ngs, schedules, services, where to Ballotpedia has ceased doing the type of interstate get help, fi nancial informa on and related records, comparisons done on Sunshinereview.org, but has along with other recurrent ques ons that would incorporated the Sunshine Review criteria in its have to be answered individually when ci zens evalua on of websites. In discussing the future inquired or fi led a Freedom of Informa on request. of government transparency in its 2013 report, Sunshine Review recognized that costs should be An independent na onal review of government considered when it discussed federal legisla on websites has given Illinois state and local that would spark new state regula on of local governments among the highest ra ngs in the data, observing, country. In the most recent publicly available government transparency study by the Sunshine “while that could be a possible long-term Review group (since absorbed by Ballotpedia), the benefi t, such legisla on could lead to a short- websites of Illinois state and local governments term increase in spending on data that is scored in the top fi ve across the country. The fi ve already available to ci zens.” 1 states earning an overall “exceeds expecta ons” Page 2 Local Government Disclosure Requirements OTHER INFORMATION PROVIDED TO MEET EXTENSIVE STATE REQUIREMENTS We found extensive “transparency-related” references that require 763 diff erent instances of repor ng requirements sca ered throughout repor ng are detailed in Appendix A. the state laws governing the 10 types of local governments that we examined: Municipali es, Table 1 iden fi es the diff erent methods of repor ng Schools, Coun es, Fire Protec on Districts, Park that are required of Illinois local governments Districts, Community College Districts, Townships, and whether that no fi ca on is by public pos ng, Road Districts, Library Districts and Sanitary Districts newspaper legal no ce, Internet publica on or some along with other state laws. The 571 statutory other manner. TABLE 1: MEANS OF PUBLICATION* Unit of Government/Statute Public Newspaper Web Other Total General Elec on Law 5 27 1 1 34 Open Mee ngs 824014 Public Funds Statement Act 0 1 0 1 2 Property Tax Code 4 20 1 3 28 Local Government 372315 FOIA 1 0 1 0 2 Coun es 13 67 5 15 100 Municipali es 53 136 14 34 237 Townships 9 15 1 3 28 Schools 13 47 24 26 110 Libraries 18 19 2 7 46 Community Colleges 2 13 0 4 19 Park Districts 7 15 0 9 31 Fire Protec on 13 25 2 7 47 Road Districts 8 14 0 3 25 Sanitary Districts 6 14 0 5 25 Total 163 422 57 121 763 *Note that there may more than one method of publicaƟ on required by Statute EVOLVING METHODS OF COMMUNICATION As Table 1 demonstrates, the most common state publica ons via the Internet in lieu of in newspapers. statutory requirement for disclosure is publica on That has sparked a ba le between newspapers, of a newspaper legal no ce. That requirement who are feeling circula on and adver sing revenue persists as newspaper readership is declining, squeezes, and local governments, which are facing par cularly among younger people. Studies show fi nancial squeezes. that daily readership has declined from 44 percent to 20 percent in the 25 to 34 age range and from Rick Edmonds, wri ng on a blog for the Poynter 72 to 52 percent in the over 65 range.2 Across Ins tute, a St. Petersburg–based organiza on that the country, local governments have pushed back supports journalism, reviewed eff orts to cut back on the expenses involved and sought to make the legal no ces in a pos ng headlined, Local Government Disclosure Requirements Page 3 “New revenue threat looms as newspapers’ newspapers are increasingly facing a reality legal no ce franchise comes under fresh of online-only public no ces.”4 pressure from cash-strapped states.”3 In Illinois, the costs to Illinois local governments As part of its Public Policy and Funding the News are high, par cularly for larger no ces.