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A new report, “Following the Money 2017: Governing in the Shadows”, released by Maryland Public Interest Research Group Foundation found that special districts across the country, like Northeast Maryland Waste Disposal Authority here in Maryland, are failing to meet modern standards of spending transparency. The report looked at 79 special districts and graded them based on the accessibility of checkbook level spending data, budget information, and audited financial statements.
Northeast Maryland Waste Disposal Authority earned an “F“, offering no spending or budgetary information online. This district operated with a budget of $74 million last year. Of the 79 districts reviewed, 53% earned a failing grade.
Special districts are government entities established by a citizen vote or other legislation. They provide a specific service or set of related services for a designated area that would otherwise typically be provided by a government entity. Such districts are defined by their ability to exercise significant fiscal autonomy, including drafting their own budgets separate from the state or local government’s legislative review process.
“Special districts like Northeast Maryland Waste Disposal Authority play an important role in public life, providing valuable services,” said Maryland PIRG Foundation Director Emily Scarr. “However, they’ve often fallen off the map when it comes to transparency because of how these districts are structured. That makes it all the more vital that districts themselves and the states in which they operate are proactive in ensuring the work they do is transparent to the public.”
With over 38,000 special districts across the country managing over $200 billion in taxpayer dollars, these government bodies should meet modern standards of spending transparency. Here in Maryland, there are more than 167 special districts. In 2013, the last year for which data was available, those special districts managed over a half a billion dollars (approx. $551,870,000). These numbers are conservative because only a fraction of special districts in each state actually report to the U.S. Census.
Nationally, special district spending transparency is lagging. Only seven special districts reviewed had a detailed spending checkbooks available online. These checkbooks allow citizens to see how their tax money is spent, dollar by dollar.
In Maryland, the report looked at the Northeast Maryland Waste Disposal Authority. While multiple counties reported their annual payments made to the district in county comprehensive annual financial reports, no information on district expenditures were provided, earning the district no points for financial reporting.
"Across a diverse array of budget sizes, function types and geographic service areas, what most of these special districts have in common is their lack of financial transparency," says Rachel Cross of Frontier Group, co-author of the report. "And because special districts are the fastest growing form of local government in the country, what we don't know about them is also growing every day."
Quasi-public and semi-independent government bodies, like special districts, tend to lag behind the transparency standards that state governments are beginning to achieve. Last year, the Maryland government earned a B+ for their online spending transparency portal.
The report offers a series of recommendations to ensure that special districts aren’t left behind as state and city governments move towards greater transparency.
- States should establish clear and uniform financial reporting guidelines for all special districts.
- States should open their transparency portals to local governments. Some states have already begun to do this, allowing local government bodies to upload spending data to a pre-built website.
- Special districts should prioritize establishing an online checkbook database of their spending. This could be as simple as an excel document, or could be as complex as uploading data to a state database. However, it is checkbook level spending information that most informs how special districts operate, and can most efficiently decrease costs and waste and increase public confidence and engagement.
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