The ability to see how government uses the public purse is fundamental to democracy. Transparency in government spending checks corruption, bolsters public confidence, and promotes fiscal responsibility.

State governments across the country have been moving toward making their checkbooks transparent by creating online transparency portals – government-operated websites that allow visitors to see who receives state money and for what purposes. Forty states provide transparency websites that allow residents to access databases of government expenditures with “checkbook-level” detail. Most of these websites are also searchable, making it easier for residents to follow the money and monitor government spending.

This report is U.S. PIRG Education Fund’s second annual ranking of states’ progress toward “Transparency 2.0” – a new standard of comprehensive, one-stop, one-click budget accountability and accessibility. (See Figure 1 and Table 1.) The past year has seen continued progress, with new states providing online access to government spending information and several states pioneering new tools to further expand citizens’ access to spending information and engagement with government.

In 2010, at least 14 states either created new transparency websites or made significant improvements to sites already launched.

Six states – Arizona, Indiana, Massachusetts, Michigan, New Hampshire, and Wisconsin – created new transparency portals in 2010. Highlights from the new websites include:

Arizona’s new website allows residents to monitor most state expenditures. The website is accessible both to researchers who know what they are looking for and non-technical citizens who are visiting the site for the first time.

Indiana’s new website is at the leading edge of Transparency 2.0, providing detailed information for residents to track many forms of government spending, revenue and performance.

Massachusetts’ new website sets a strong standard for presenting tax expenditures by displaying the cost and purpose of each tax expenditure program.

Many states over the past year notably improved their transparency websites. For example:

New Jersey and South Dakota upgraded their websites so they now provide checkbook-level detail, allowing visitors to track the payments made to specific vendors.

Louisiana made various improvements to its website over the past year, making it now among the nation’s best.

Oregon embedded data viewing tools into its website that allow users to search through financial data, download their search results, and create maps and charts.

Forty states’ transparency websites now provide checkbook-level information on government spending.

Forty states allow residents to access checkbook-level information about government expenditures online. (See Figure 1 and Table 1.) The majority of these states (37) also enable residents to search for expenditures by vendor name or type of service purchased.

Nine of these states are “leading states” in the transparency movement, hosting searchable, user-friendly websites that provide comprehensive information on a range of government expenditures. Most of these states provide detailed information on the grants and economic development incentives awarded to companies and organizations; all but one allow visitors to monitor the funds forgone every year through tax expenditures; and more than half provide complete copies of contracts.

in the transparency movement, hosting searchable, user-friendly websites that provide comprehensive information on a range of government expenditures. Most of these states provide detailed information on the grants and economic development incentives awarded to companies and organizations; all but one allow visitors to monitor the funds forgone every year through tax expenditures; and more than half provide complete copies of contracts. Thirty-one states are “emerging states” with transparency websites that provide less comprehensive information or, in some cases, are not easily searchable. Some of these states allow citizens to track trends in state spending over time and most of these states allow citizens to find out some details on specific state purchases from particular vendors.

Ten other states are “lagging states,” whose online transparency efforts fail to meet the standards of Transparency 2.0.

Nine of these states have taken the positive step of creating spending transparency websites, but these sites lack many important Transparency 2.0 aspects, especially vendor-specific information on government spending.

One state does not host government spending transparency websites that are accessible to the public.

“Red” states and “Blue” states have both embraced spending transparency. The ranks of leading states are split roughly equally between those that voted Democratic in the last presidential election and those that voted Republican. In fact, the average score of Obama-voting states is almost exactly the same as that of McCain-voting states.

Many states are improving their websites beyond basic Transparency 2.0 standards, empowering residents to monitor government spending in unprecedented ways.

More powerful searches: Maryland and New York have made tracking vendor-specific payments easier for residents so they can now easily search for the vendor’s location and the month the payment was awarded, and easily distinguish grants from contracts.

More sources of data: Maryland, Ohio, and Virginia have posted new sets of fiscal data to their sites, including data on state loans, bonded indebtedness, and registries of state property.

More ways to engage citizens: States such as Utah and Texas have added tools to their websites to increase citizen involvement, such as providing a glossary of terms (empowering users with the knowledge to navigate complex financial terminology) and surveys on the site’s performance.

All states, including leading states, have many opportunities to improve their transparency websites.

Most transparency websites do not provide detailed information on government contracts. Even some of the leading websites provide only a short description of the purpose of contracts.

Only about half of the websites allow users to download datasets in formats such as Excel, enabling more detailed off-line analysis of government spending data.

Only 26 states include spending data prior to Fiscal Year 2009.

Only 14 states provide links to their tax expenditure reports.

Only 14 states provide any information about local government spending.

Only four states provide the most comprehensive level of information on grants and economic development incentives awarded to companies and organizations.

In the next year, state governments across the country should strive to improve government transparency and accountability online. Leading states should advance the Transparency 2.0 movement by continuing to develop innovative functions that elevate transparency and citizen involvement. Emerging states should follow the example of the leading transparency states by improving the search functions on their websites and increasing the amount of information available to the public. Lagging states need to join the ranks of Transparency 2.0 governments by establishing one-stop, one-click searchable websites that provide comprehensive information on government expenditures.

*Note: For Figure 1 and Table 1, see linked report.

*Note: U.S. PIRG Education Fund researchers sent initial assessments to transparency website officials in all states and received feedback from such officials in 39 states to ensure that the information in this report is accurate and up-to-date. Website officials were given the opportunity to alert us to possible errors, clarify their online features, and discuss the challenges to achieving best practices. Their comments are discussed in the section entitled “State Officials Face Obstacles and Challenges in Operating Transparency Websites.”