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Where Public Policy and Small Business Meet
I spent this past weekend at Transparency Camp West, at the Google campus in Mountain View, CA. I went expecting to be surrounded by my fellow policy wonks, but surprisingly they didn’t make up the bulk of attendees. Most of the folks in attendance seemed to be developers looking to market their web applications. There were some marked exceptions, primarily from outside of the US. I had some fascinating conversations with Ilya Ponomarev, a member of Russia’s State Duma (parliament) and Chair of the Parliament’s High-Tech Development Subcommittee, Daniela Silva, a graduate student from San Paolo, Brazil, Pedro Valente, a Yahoo! employee working out of their Brazilian office and Jonahtan Adir, a senior policy advisor to Israel’s President, to name just a few.
The focus of the weekend was primarily on federal transparency. My interest is primarily on local and state government. I am also a serious data junkie, so my ears perked up whenever I overheard a conversation about data. During one of my many data-centric conversations, one of the tech folks asked me what kind of data I would like to see used in his web application. My immediate response was budget data. The techie looked at me blankly and said that budgets only involved entering numbers, and really wasn’t very interesting. He then asked me again what data would be most useful to me. Ilya was also part of the conversation and his explanation on the importance of budget data was met with a similar dismissal. That is when I knew I wasn’t in Kansas anymore.
Budgets are not spreadsheets or columns of numbers. Budgets are policy documents. Budgets are where the rubber meets the road; where priorities are put to the test. Budget Hero is a great exercise in matching your priorities to federal expenditures. A politician may talk a good game, but validation comes only when we get to peek behind the curtain (apparently I am in a Wizard of Oz kind of mood today).
Think of your own personal budget. There are times when your spending behavior is consonant with your values. For example, buying locally sourced and organic foods, even if they are a bit more expensive than the produce grown in Chile or Mexico. From time to time, we all find ourselves facing a disjuncture between our values and our spending behavior. Usually it is small, like eating junk food when you didn’t have time to make lunch.
Other times the disjuncture has a significant budget impact. For example, If you had decided to purchase a Suburban because you have a large family and need a lot of space to haul them and their stuff around, then your spending behavior is consonant with your needs. However, if you decide to buy a Prius because of its great fuel efficiency, and instead purchase a Suburban that gets 14 MPG, your spending behavior is not consonant with your values. Neither the Prius nor the Suburban are inherently good or bad. They each serve their own purpose. The problem only arises when you say one thing and do another.
I wish I could say I only had that conversation with one person who was an anomaly. Sadly, I cannot. What I can say is that many of those calling for transparency are doing so without a clear sense of what or why. No one I spoke to could truly articulate what they meant by transparency. The most common answer can be summed up in the Sunlight Foundation’s mission statement:
The Sunlight Foundation is committed to helping citizens, bloggers and journalists be their own best watchdogs, by improving access to existing information and digitizing new information, and by creating new tools and Web sites to enable all of us to collaborate in fostering greater transparency.
At first glance, the mission sounds like it has meaning. But when I took the time to parse it, I still wasn’t able to answer the basic question of what or why. The mission makes no reference to improving transparency in government. Any connection to government is implicit, forcing people to apply their own interpretation–ensuring a Tower of Babel with no common language. Nor does the mission statement address the question of why. The most effective mission statements are written in such a way that all stakeholders will know when the mission has been achieved. The classic example of a good mission statement is the March of Dimes. The March of Dimes was created to fight polio, a mission in which they succeeded, having supported the development and distribution of the polio vaccine. It seems to me that the transparency conversation can only move forward when we have developed broad consensus on what should be transparent and why.
The following anecdote really captures the problem. A person at Transparency Camp said he wanted the federal government to give him a receipt like he would get at a hotel or a restaurant. Further discussion clarified that what he was really asking for was a breakdown of how the hotel determined its price. He wanted his receipts to include the following:
Hotel room – $100
The list goes on and on, but I am going to stop there because I think I have made my point.
If hotels had to generate receipts like that for every customer, even Motel 6 rooms would cost hundreds and hundreds of dollars. The amount of staff time that would be required to generate receipts like that is mind-boggling. And it couldn’t just be done once. Supply prices change on a regular basis. Receipts would need to be generated for the precise length of time guests were in their rooms. A guest who checks in at 3pm will use more water and utilities than someone who checks in at 8pm (I really am having way too much fun generating these lists of expenses). We don’t always want a fine, detailed accounting of how our money is spent. Not when fine details are just not worth the cost of generating them.
Public budgets are the same way. Do we really want to use our tax dollars used to track down every incremental cost included in every expenditure? Public information laws require governments at all levels to disclose their budgets. For the locals who read this blog, City of Portland, Multnomah County and Metro have budget pages on their websites. Want to do some additional analysis yourself? Fortunately several jurisdictions (including the federal government) offer easy access to APIs.
I am all in favor of volunteers and voluntarily-funded organizations (aka non-profits) creating applications using the data already available through APIs. I support anyone’s desire to drill down into the minutiae of budgetary data. What concerns me is when we criticize government for not doing the fine-grained analysis for us. I see that as serious misappropriation of tax dollars.
When a business registers on a government’s procurement website to bid on government projects, all of that information becomes part of the public domain. It is then perfectly legal for other businesses to either directly harvest that data, or pay the jurisdiction a fee for access to the data. Every time I have registered any of my businesses, shortly thereafter my mailbox begins to fill up with official-looking ads for fee-based contract listings.
Some of the businesses that solicit me offer a useful service in which they track and sort bid opportunities so that the business owner doesn’t have to. Given the number of places where one needs to look for bid opportunities, there can be great value in being able to outsource the process, as long as their advertisements make it clear that they are a non-governmental entity providing a service.
There is another class whose advertisements look as through they come directly from a jurisdiction’s procurement department. These ads try to create a sense of urgency through false deadlines and false promises of access to bid information before the general public. In order to stay (just barely) on the right side of the law, these mailers often have a very small disclosure somewhere that they are not speaking on behalf of a government procurement entity. But even when I know that the mailer is an ad, I have often had a hard time finding the disclosures, even when I am looking for them.
Then there are the businesses who offer workshops, seminars and written material to teach people how to access government bidding opportunities. Once again, some of these businesses offer a valuable service by teaching business people how to navigate through all of the various government procurement sites, how to effectively respond to an RFP and how to become a tier II or tier III provider (Tier I providers are the businesses that secure the full contract, Tier II and Tier III providers are subcontractors to the Tier I supplier). Then there are the scammers that offer great “value” by promising “true wealth” by using “hidden websites” that they will share (for a reasonable fee, of course).
Now that everyone is abuzz with opportunities created by the stimulus package, I have been seeing more scam artists trying to cash in. This blog post was prompted by a workshop I went to (although honestly, I was only able to stand it for about 30 minutes) recently where the speaker was using fear tactics and lies to convince everyone in the room that they only way to stay in business and not end up on food stamps is to purchase their materials.
Once again, there are some very legitimate service providers out there who offer assistance to business people who don’t have time to check every procurement website or need assistance completing an RFP. But please, read their mailers carefully, especially the fine print. And if you go to a free workshop where the speaker is making you fearful or making promises that are too good to be true, walk out.
Note: I have not included names or links to any of the scammers websites because I don’t want to drive any traffic or business to them.
While he was still President-Elect, Barak Obama made it abundantly clear that he wanted no earmarks to be part of the economic stimulus package. While often perceived as a synonym to “Pork-Barrel spending,” earmarks can serve a useful role. They are a way that congress can designate funding for specific work. They are also a way for the congress to negotiate compromises, which, when done within reason, are actually a useful tool to move decisions forward.
But, there is also a reason that earmarks have earned a bad name. As I mentioned in a previous blog post, TARP, the previous stimulus package, was earmarked for banks, despite the fact that banks were clear, in a very public way, that they had no intention of using it as directed. Negotiating earmarks can also slow congressional decision-making to a halt. The funding pie is never big enough, so not only are people scrambling for a slice, but arguing like little children over whose piece is bigger.
Both the House and Senate are getting very close to agreeing on a stimulus package that President Obama can sign. Everyone involved seems to recognize the urgency of the situation and the need to get money flowing back into the economy. At this point in time, it is looking like both the House and Senate will sign on to the idea of having the jurisdictions that receive the money decide how they will spend it. But not without some parameters from congress. In HB1, the House economic stimulus bill that is currently being debated, there are dates by which the money needs to be released by the federal government (30 days for formula funding, 90 days for competitive funding and 120 days for funding for new programs). In addition, the funds are released conditionally on a “use it or lose it” basis. So if 50-75% of funds are not used by the recipient jurisdictions within a pre-determined time-frame, the money goes back into the pool to be redistributed.
What happens next? Well, according to Sarah Binder of the Brookings Institution:
When this bill passes, a Niagara Falls of money will flow out of Washington and into the accounts of state highway commissioners, governors and legislatures, local school boards, county executives — even mayors
Then local jurisdictions, rather than national legislators, can decide how to best allocate the money to revivify their local economies.
I find the resistance to shifting the decision making to the local level very interesting. From my perspective, localizing the spending decisions promotes greater local accountability because the locus of control is so much more accessible. When funding decisions are made in Washington DC and they are poorly suited for a state, a county, a city or a school district, it is way too easy to blame “those folks in Washington.” The machinations of elected officials in our national capital are mocked as often, if not more so, than they are taken seriously.
However, having lived in two large east coast cities (New York and Philadelphia), a small Californian city (Santa Cruz), as well as our lovely medium-sized city of Portland, I have observed that ordinary people (as opposed to policy wonks like me) actually track funding decisions being made on the local level. When city or county governments are debating whether to pave roads or increase park maintenance or whether to close a community center–citizens pay attention. They pay attention because the decisions being made will impact their day-to-day existence. They pay attention because the money being debated is at a scale that is comprehensible (thousands and tens of millions, rather than billions and trillions). And they pay attention because it is much easier to write letters, call or testify to a legislative body that is driving distance of one’s home.
The opposition I have heard thus far to localizing the decision-making is centered around local jurisdictions’ inability to make sound funding decisions. That will certainly be true in some cases. But, what will also be true is that decisions will be made that align much more effectively with the needs of the local economy than any decisions that could be made at the federal level. My question is whether the stimulus funding that is being allocated by local jurisdictions will be spent more effectively than the TARP funding allocated by congress.
The good news is that we are likely to be able to answer that question within the next couple of years. U.S. Rep. David Obey (D-WI), the chairman of the House Appropriations Committee explains it this way:
We have more oversight built into this package than any package in the history of man. If money is spent badly, we want to know about it so we can hold accountable the people who made that choice.
I am looking forward to this grand experiment in local control. I not only strongly believe that it is the right decision for this time and this place, but I am also optimistic that we, as nation, will learn a lot about how to most effectively spend our public dollars.