Tax and Budget News

Contracts and Subsidies More Transparent Elsewhere

This year many U.S. states have launched what they call “Google Government” by using the Internet to make accessible detailed information about where tax dollars go and who gets government contracts and subsidies. A new report highlights how far Maryland lags behind the forefront of this national trend.

In a growing number of other states, searchable public databases provide easy access to information about government expenditures by agency, category, or contractor. With a few clicks, taxpayers and journalists in some states can discover details about government contracts, including how much contractors lobbied or gave in campaign contributions.

“Transparency is necessary to keep a watchful eye on the public purse,” said Johanna Neumann, policy advocate for Maryland PIRG, which supports public transparency. “You can’t hold elected officials accountable without this kind of information,” said Neumann. 

"The report, released today by the Washington D.C.-based think tank Good Jobs First (and available at www.goodjobsfirst.org) found that Maryland is behind the times when it comes to disclosing state contracts and subsidies. The report scored Maryland a “D minus” and “F” in these subcategories respectively.

Maryland has only limited information available about its contracting. The state provides some information on service and information technology contracts. But contracts are not searchable by vendor name or type of contract. Some contracts lack the name of the vendor altogether. And past contracts are not available to view. Only Kentucky, Rhode Island, and Wyoming  provide less information and access on contracting, according to the report’s rankings.

When it comes to disclosing financial subsidies and company-specific tax breaks, a few Maryland programs do fairly well but many others lack any disclosure at all. Only a few programs have mechanisms to recoup subsidies if recipients do not provide the investment or hiring they promise. Unlike some other states, there is no system for tracking the results of subsidies and no comprehensive database exists to search for the type or recipient of subsidies.

"We found that Maryland has a long way to go, especially with regard to economic development subsidies, in fully disclosing interactions with the private sector," said Philip Mattera, research director of Good Jobs First and principal author of the report. 

Nationally, payments to private contractors accounts for over 40 percent of state and local government spending according to U.S. Department of Commerce reports. Company-specific subsidies and tax incentives have also grown in recent years.

Earlier this year, a group of twelve Maryland Delegates and four Senators filed the Maryland Taxpayer Transparency Act of 2007 which would have mandated a searchable website providing information on state grants, contracts, subcontracts, and loans. The bill, which would not have disclosed tax breaks, failed to reach a full vote in either branch of the General Assembly. 

“With all the debate about how to solve Maryland’s large budget shortfall,” said State Delegate Anthony J. O’Donnell, cosponsor of the legislation and House Minority Leader, “the state should at least provide full information about where the money goes.”