Open Finance Takes the States

September 15, 2015 11:53 am PST | Public Finance

The movement to make detailed data on how our tax dollars are being spent open and available to all Americans is spreading rapidly across the nation. Citizens have always wanted to know how their government is using public funds — but it is only with the advent of the Internet and 21st century digital tools that opening up access to detailed data about public finances has become practical and accessible for all governments.

Just a few years ago, only large cities and states could afford to make their financial data accessible and open to the public. New York City, for example, spent more than 3 million dollars over three years to create Checkbook NYC in 2010. In the last two years, advances in technology have allowed governments to achieve the same level of transparency in a matter of weeks, for a tiny fraction of that cost. Now, cities as small as Kelso, Washington, (population 11,810) are reaping the benefits of transparency without a major IT investment or a significant commitment of staff time.

State-Level Financial Data

In the last few months, another new and exciting trend is emerging across the United States: efforts by states across the country to make financial data available to the public at scale. In some cases, these initiatives are also leveraging standard charts of accounts or other tools to standardize data and make it more easily consumable for the public, researchers, and analysts.

Recently, North Carolina’s legislature proposed sweeping transparency requirements in its annual budget appropriation; California’s State Controller began publishing detailed financial information and payroll details for all local agencies; and Utah and Ohio expanded existing tools to create central repositories of financial data from local agencies. All of these projects are publicly accessible and give constituents, policymakers, and analysts unprecedented access to information on how tax dollars are collected and spent.

State controllers, auditors, and state legislatures are joining the front lines in the movement towards transparent and accountable government, unlocking previously hidden insights for citizens and residents across the country.

They also provide significant value for the agencies launching them — Utah’s portal is used heavily by the state auditor to ensure accountable use of taxpayer funds, and state controllers and auditors can save tens of thousands of dollars in printing costs by replacing hard copy reports with automatic digital dashboards.

Help Citizens Know Who Does What

These initiatives can also help address one of the primary challenges that voters face when trying to understand and evaluate their government: figuring out which agency or level of government is responsible for different services or programs.

Citizens think regionally, not jurisdictionally — they understand their neighborhood and region, but very few distinguish between between the services provided to them by their city versus their county versus their state. By showing which levels of government deliver which services, governments can educate stakeholders and voters to help drive more honest and transparent conversations about government performance and operations.

As more and more states across the country launch these cutting-edge initiatives, citizens will gain increasing insight into their government, and the capacity of analysts and researchers to compare governments and unlock previously hidden trends will expand dramatically.

It’s an exciting time to be working in government transparency — what is your state doing to open the books for its citizens? To learn more about how financial transparency can aid your organization, check out Socrata’s new eBook, “Three Challenges That Governments Are Solving With Open Financial Data,” which delves into the advantages of open finance.


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