California Progressives Score Key Transparency Victory

In August, California lawmakers approved AB 2666, a bill sponsored by Asm. Nancy Skinner that requires the state's Franchise Tax Board to compile information on corporate tax expenditures and publish the information on California's Reporting Transparency in Government website.  Pedro Morillas, a Consumer Advocate with CALPIRG, commented on the bill's movement, “[c]orporate tax breaks will no longer be a bottomless pit for taxpayers.  We’ll still be sending money down the hole, but now we’ll be able to see where it lands.” In 2009 alone, the state spent $14.5 billion on corporate tax expenditures with no oversight or accountability mechanisms.

In recent years, California has taken steps to improve transparency of state spending, but significant work still remains.  In U.S. PIRG's Following the Money: How the 50 States Rate in Providing Online Access to Government Spending Data - a comprehensive analysis and ranking of each state on the development of comprehensive, one-stop, one-click budget accountability and accessibility - California's online transparency efforts received a "D" for poor search-ability and lacking complete information about current and past contracts.  The report also discusses some of the major benefits of corporate transparency, which can promote sound fiscal practices, identify spending inefficiencies, reduce corruption, and encourage a more focused budget process.

The legislation now awaits the signature of Gov. Arnold Schwarzenegger, who has been a strong advocate for accountability throughout his gubernatorial tenure.  For instance, in June 2009, the Governor signed an executive order that augmented the scope of the state's transparency website.  He emphasized, "[t]he people of California have a right to know what they are getting for their money.  In this time of deep recession, it is more critical than ever that state government operates efficiently and is accountable to the people."

A confluence of factors have contributed to greater legislative and activist interest in pursuing transparency, including: the lingering effects of the economic downturn, budget shortfalls and plummeting revenues, the abuses of the financial sector and their major role in the recession, and the transparency requirements in the Recovery Act.  Within this framework, progressive state legislators have been advancing transparency and accountability initiatives in order to safeguard taxpayers, foster better budgeting practices, promote good jobs, and garner savings.  As part of our 2010 Shared Multi-State Agenda, the Progressive States Network has been working with lawmakers nationwide to promote Corporate Transparency in State Budgets policies.