By Marc Joffe
In March, Congress passed the $1.9 trillion American Rescue Plan Act (ARPA), which included $350 billion in aid to state and local governments. As I reported when the legislation was being debated, state and local government revenue shortfalls were far less than originally feared and their incremental COVID-related expenses had largely been offset by earlier rounds of federal COVID-19 relief and stimulus legislation. The $350 billion in new federal aid is proving to be far more than was necessary to offset COVID-19’s impact on state and local governments. That said, the aid package may help provide some long-term benefits in the form of increased government financial transparency—a trend that is starting in the Delaware State Auditor’s office.
The 2009 American Rescue and Recovery Act set a precedent for linking major government spending initiatives with fiscal transparency. The Obama administration created a website called recovery.gov to detail how the stimulus funds were being spent. Although that site was shut down in 2015, an archived version is available from the Library of Congress. Much of the functionality of recovery.gov has been incorporated in the federal government’s primary spending transparency website, usaspending.gov, which has more recently been updated to report on federal spending related to the COVID-19 pandemic.
Although usaspending.gov is a great resource for understanding how the federal government is allocating emergency COVID-19 related stimulus funds, taxpayers and researchers will need to consult state and local resources to see how these governments are spending their shares of the $350 billion of ARPA dollars. In Delaware, State Auditor Kathleen McGuiness has launched a website that allows the state and local governments to report ARPA spending.
The Delaware transparency platform, branded as Project: Gray Fox, is powered by OpenGov, a company that creates and maintains budget visualization sites for a large number of local governments across the country. Governments interested in launching transparency portals can build them with internal programming staff or leverage open source technologies such as Aragón Open Data or OpenSpending but using an experienced software vendor is likely to be the quickest way to launch for most governments. Aside from OpenGov, the fiscal transparency market is also served by ClearGov and Socrata (now a part of Tyler Technologies).
Once fully built out, Delaware’s Gray Fox will contain ARPA spending data from the state, 19 K-12 school districts, 23 charter schools, three counties, and 57 municipalities. At this point, many local governments have not developed plans for spending the federal aid they are receiving, let alone having made any expenditures. But once they begin spending ARPA funds, they will be able to upload their spending information to a user-friendly page on the Gray Fox platform.
Users will be able to see individual expense items with data points including the date of each expense, the type of goods or services provided, and the name of the supplier or vendor. At an aggregate level, the dataset promises to provide interesting insights into how spending is being prioritized by Delaware and which government contractors are benefiting the most. McGuiness tells me she hopes that the Gray Fox site can reduce the number of Freedom of Information Act requests from journalists and citizens interested in tracking ARPA spending, which would reduce the time state and local government employees would otherwise have to spend fulfilling these requests.
Another benefit of the platform is that it allows most participating governments to generate annual project and expenditure reports required by the U.S. Department of the Treasury under ARPA. The new capability can be used by smaller governments, i.e., those with 250,000 or fewer residents, which must begin filing these reports on October 31, 2021. All local governments in Delaware, with the exception of New Castle County, fall within this definition.
McGuiness says she also hopes that the initiative will set a precedent for governmentwide financial transparency around Delaware. In recent transparency scorecards produced by the US Public Interest Research Group (PIRG), Delaware has not been among the leaders. For checkbook transparency, Delaware ranked 44th in 2016 but improved to 17th in 2018. In 2019, PIRG gave Delaware a grade of D+ for its reporting on economic development subsidies, which can take the form of direct cash payments or tax concessions. McGuiness sees potential for the Gray Fox Initiative to create a new culture of transparency that will yield higher rankings for the state in future surveys.
Whenever the next economic downturn arrives, taxpayers can expect some to call for another injection of federal funds into state and local government balance sheets. Better transparency could well inform a future debate over federal assistance, helping us understand how and when today’s funding is being used and whether or not there’s a need for additional federal aid.
Originally published by Reason Foundation. Republished with permission.
