53% of Special Districts Failing on Spending Transparency
U.S. PIRG Education Fund and Frontier Group
A new report found that most special districts across the country are failing to provide accessible, online, and comprehensive information about their spending. Special districts are created to provide specific services like fire protection, medical care, transportation and housing for a designated area that would otherwise typically be provided directly by a city, county or state. 53% of the 79 special districts evaluated across the country earned failing grades for their spending transparency, according to “Following the Money 2017: Governing in the Shadows” by United States Public Interest Research Group Education Fund and Frontier Group. Each district evaluated earned an A through F grade for its transparency efforts.
“Special districts play an important role in public life, providing valuable services,” said Michelle Surka, co-author and program associate with U.S. PIRG Education Fund. “However, they’ve often fallen off the map when it comes to transparency. 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.”
In the U.S., there are over 38,000 special districts offering dozens of different types of services, often levying taxes on citizens within the district or otherwise collecting fees to fund their work. Nationally, these districts spend more than $200 billion annually. Illinois, California, and Texas have the most special districts of all states. Because of how special districts are structured, large expenditures can occur mostly or entirely off the budgets of state or local general purpose governments.
Budget and spending transparency holds government officials accountable for making smart decisions, checks corruption, and provides citizens an opportunity to affect how government dollars are spent. In 2017, true transparency means online—that’s why this report evaluates how comprehensive, accessible, and user-friendly special district spending transparency data is online. The public should have access to a user-friendly web portal with budgets, financials and checkbook level information that you can search based on common categories, amounts, and spending recipients as well as a way to access data that is downloadable.
“Across a diverse array of budget sizes, function types and geographic service areas, what most of the special districts in our report 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.”
This report’s snapshot of special district online financial practices shows that many of these governmental bodies are not meeting standards for government transparency. Of the 79 districts reviewed:
- Seven special districts, 9 percent of those evaluated in the report, received leading scores.
- 30 special districts, 38 percent, received lagging scores.
- 42 special districts, 53 percent, received failing scores, having failed to meet basic financial transparency criteria.
- Of the failing districts, 11, or 14 percent of districts evaluated, received a score of zero, having made little to no evident effort to provide online financial transparency information.
The seven districts that earned leading scores were in located in just five states—Texas, Illinois, Oregon, Kentucky, and Utah. These states had taken proactive steps to ensure that either their largest special districts or all special districts are held to the same transparency standards as other government entities. Since many special districts are relatively small and staffed with volunteers, their transparency efforts should be encouraged and supplemented by city, county, or state governments.
“With so many special districts operating around the country, levying taxes and impacting public life on the most local level, it doesn’t make sense for their $200 billion worth of activities to remain off the books,” said Surka. “When state or county governments take action to start holding these districts accountable, not only is there more oversight, but public understanding and confidence in these districts also improves.”
Learn more about special districts with this Fact Sheet.