“Transparency is good, even if not always useful”

Originally posted Thursday, Feb. 07, 2013

There was irony all over the place just outside the Senate Chamber in Austin Thursday as some top state leaders announced proposed legislation to force greater transparency in Texas local government finances.

The Legislature is not always the most transparent government body, nor are many of its members averse to hiding what they don’t want known.

Take this from House Budget Committee Chairman Jim Pitts, R-Waxahachie:
“When we write the budget each session, we require transparency and access to information,” a news release about the announcement quoted Pitts as saying.

Pitts is one of the good guys in the Legislature, so I don’t mean to complain about him too much. But what he said is just plain wrong.

When lawmakers passed the budget two years ago, they quite proudly proclaimed that it was balanced. The numbers in the document transparently showed it to be balanced.

But that was not really true. It was balanced only because they deliberately ignored some state obligations — like $4.5 billion in known Medicaid costs.

They’ll make up for it this session by allocating money retroactively, but real revenues and expenses were not balanced when the original budget was approved. It does no good to call something transparent if you can’t trust what you are seeing.

I’m all for transparency. The bills introduced Thursday were inspired by Comptroller Susan Combs, who has been going around the state holding town hall meetings and trying to ferret out categories of government spending that seem like they should be made more transparent.

Only bad guys are against government transparency, and I’m a good guy. But that doesn’t mean I’m cheering everything in these bills.

Combs points to an increasing amount of local government debt in Texas and says that’s a bad thing. It’s true that being debt-free is optimal, but debt is a useful tool for achieving worthy goals, and few operations of any size function without it. What really matters is the debtor’s ability to pay off those obligations over time without shackling daily life or the ability to achieve other worthy goals.

At Thursday’s news conference, Combs touted provisions of the legislation that would require local governments to supply additional information on bond election ballots. That includes the government entity’s total outstanding debt, the combined principal and interest required to pay off that debt “on time and in full” and how those figures would change with the issuance of proposed new bonds.

That’s all good information to have, but it requires voters to shift to a new mindset to make an intelligent decision. Currently, the focus is more on how much the new bonds would cost the voter in taxes each month or each year.

The new information shifts attention to much bigger numbers. Often, bond opponents like to do this, because bigger numbers can be more discouraging.

In a report issued in September, Combs cited the example of an election for $25.8 million in bonds that over time would draw an interest cost of $18.2 million, for a total outlay of almost $44 million. The example showed the typical homeowner’s taxes increasing by $61 a year.

Currently, the voter decides whether a bond project (maybe better roads or nicer schools) is worth $61 a year. The new ballot language adds the element of whether the improvements are worth $44 million over 30 years.

To me, the $61 a year is a better decision-making tool. I can’t tell whether a new school or some other project is worth $44 million. I can decide whether I believe it’s worth $61 a year to me and to each of my neighbors. And I don’t always decide that it is.

Mike Norman is editorial director of the Star-Telegram.
Twitter: @mnorman9