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Local government transparency, another casualty of the tax bill veto

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I wrote a letter to the lawmakers who sponsored a great idea that was included in the tax omnibus bill vetoed by Governor Dayton on Monday. Here’s the idea: Require cities (and I hope all units of government, including school boards, eventually) to post four years of budgets by expenditure type on their website.

This would make city spending so much more comprehensible to voters and frankly city council members. I know as a former city council member how dependent I was on staff; you have to push to get behind the numbers. I could have done a better job with this kind of reporting. I can see greater accountability and leaner budgets as clear outcomes.

Here are some of my thoughts on the omnibus tax bill and the expenditure type reporting that I shared with legislators this week:

First, the veto of the tax bill was a blow because Minnesota’s business community needs tax relief NOW. It is odd that Governor Dayton vetoed the tax bill while calling for broader property tax relief. Why couldn’t he sign it in the spirit of making some progress?  Maybe because he does not view the private sector as the prime creator of jobs; that’s something the government does with tax dollars and bonding bills. (And, being Dayton, his idea of tax reform must include raising taxes on “the rich”.)

You may have heard that Chief Executive Magazine ranked Minnesota 36 out the 50 states---dropping 7 places since last year. Texas took number one again and California came in dead last. We are much too close to California in the way executives perceive Minnesota. They give us good marks for workforce quality and living environment but low marks for taxation and regulation (and see a negative trend because of our divided government). You can see how all the states were graded here.

Our neighbors (nearby competitors for good people and business) all ranked above the median: North Dakota (15th), South Dakota (19th), Wisconsin (20th), Iowa (22nd) and Indiana (5th).

Second, I have to admit I was really excited about the tax expenditure reporting idea (tucked into the tax omnibus bill) requiring local governments to post 4 years of spending by function and expenditure type on its web site.  This would tell taxpayers so much more about where their money is going (e.g. ever-increasing employee salaries, benefits and pensions—and where it is not going like roads, parks and sewers).

Here is an idea that might cheer us up: What if you went back to your districts and asked the towns you represent to do this on their own as a pilot? Many will say no for the same reason they lobbied against it this session (they do not want people to know where the money is going). But some towns will surprise you and do this (maybe their councils will insist on it).

If this is a successful educational campaign, you will have voters asking local government why they do not offer this kind of spending data on the website.

President Reagan was often most successful when he went around Congress to the People, asking us to tell Congress what we wanted. Maybe you can generate some momentum when you are in District by going around our Executive Dayton and the lobbyists for local governments by taking the idea directly to voters.

End Note: One person who got the above letter was concerned that this is just another unfunded mandate, noting that cities felt they would need new software and training to do this. It is a great question. As a big fan of local government and a fiscal conservative, I do not like unfunded mandates. But we have a talented friend who was able to run several city budgets on a standard issue Texas Instrument in 4-6 hours. I suspect the cities demand for fancy training and new software is just an excuse to avoid this great idea (either because of resistance to change or because staff knows this would be a game changer).

Expenditure type reporting would be a powerful tool for trimming budgets all around the state and making government spending more accessible to voters at a time when they are very interested in looking behind the curtain. This is one of those ideas that pays for itself and then some.

It is fitting in the age of web-based information and big government, that elected officials and voters get a tool to help them understand where the money is going.