Thomas Jefferson envisioned that the finances of government should be "as clear and intelligible as a merchant's books," allowing "any man of any mind" to "comprehend them, to investigate abuses and consequently to control them."

While the Information Age places such transparency within our grasp, a detailed expense report for Michigan government will not soon appear on the Internet for public inspection. With one exception: Last spring, Michigan Secretary of State Terri Lynn Land began placing a quarterly report of the Department of State's expenses online. Despite this example to guide them, the Office of the Governor has refused a request to replicate this report for other departments of state government, dismissing the idea as "cost prohibitive."

This request to the Office of the Governor was made by the Mackinac Center for Public Policy's "Show Michigan the Money" transparency project (www.mackinac.org/10694.) An identical and earlier request from the Center is what inspired the Secretary of State to begin posting her department's reports, and the MDOS has since provided a cost estimate for the project.

Cost for staff to initially create the first online expense report was $2,400. The "going forward" price to continue posting this report each quarter is just $700; or $2,800 annually. The MDOS also notes that these costs have been and will be entirely absorbed by assigning the task as a job priority for their existing employees. No additional staffing costs were or will be necessary.

The governor's office appears to be misunderstanding the modest nature of this request for information. Bearing in mind that the annual budget for all of state government is nearly $43 billion, it would appear that the comparative price to implement an MDOS-equivalent report for all departments would be far short of "prohibitive."

The fiscal 2008 budget for the MDOS was just short of $208 million, so figuring out how to produce that first report cost the department 0.0012 percent of its total budget. Now that they know how to do it, the cost for each subsequent quarterly report is just 0.00035 percent of the annual budget. Roughly applying these ratios to the entire $43 billion state budget would mean that the total cost of creating the first reports of this kind for every department would be $516,000. Thereafter, the total cost of quarterly reports for every department would be just $129,000 — or $602,000 annually to keep this whole transparency project running. 

These numbers are figuratively "pennies in the seat cushions" of the state budget. For example, one relatively new government program, the "21st Century Jobs Fund," cost taxpayers $65 million in 2008; and a brand new program designed to lure movie producers into Michigan carries an estimated 2009 price tag of $117 million. It would take less than one week of spending from just one of these new programs to start up and fully fund an online expense report project for every state department. The decision to "show Michigan the money" — or not — is a matter of priorities, not resources.

This ballpark figure will surely vary depending upon the specific details of each department's spending. But economies of scale could also drive down the estimate significantly: The Michigan Department of Information Technology should theoretically find it easier to replicate the procedure for each department now that MDOS has shown the way.

The MDOS has taken a modest but firm step in the right direction, placing online the names of vendors getting paid by the department, the reason for the expenditure and the amount. The report has its limitations, and falls short of the "gold standard" of transparency set by Missouri (a state Web site which, among other things, is updated daily and also provides the salary information for every state employee). While the Office of the Governor has stated that replicating Missouri would cost $100 million or more, they have yet to justify why replication of what the MDOS has already accomplished is beyond Michigan's reach.

A government that is spending money on everything from 20th Century Fox to 21st Century Jobs shouldn't have a 19th century standard for showing the taxpayers where it's all going.

Ken Braun is director of the Mackinac Center for Public Policy's Show Michigan the Money transparency project and the senior managing editor of Michigan Capitol Confidential.
For additional information and an opportunity to comment on this issue, please see www.mackinac.org/ 9795.

The direct subsidy from all Michigan taxpayers to the Michigan Department of Labor and Economic Growth will increase sharply for fiscal 2009, under an agreement ratified by large majorities in both chambers of the Legislature and signed by Gov. Jennifer Granholm on July 17. While DLEG is financed primarily with fees and federal revenue, it also receives money from state government's general fund, the main discretionary pot of revenue that comes from Michigan business, sales and income taxes. The general fund contribution for DLEG will increase by 59.9 percent for 2009, to $75.9 million. More than half of the $27.5 million increase will be used to fund "No Worker Left Behind," another state job training program that did not exist two years ago.

The total DLEG appropriation enacted for 2009 will be almost $1.4 billion — the largest appropriation ever for this department, exceeding the amount enacted the prior year by 6.6 percent.

NWLB is primarily a free tuition program open to Michigan workers who have been laid off or terminated (recent high school graduates are not eligible.) According to its Web site (www.michigan.gov/nwlb), NWLB is a one-time offer to displaced workers and provides up to two years of free instruction at one of the state's community colleges or public universities. To be eligible, a person must pursue certification or a degree in a "high demand" field, an "emerging industry," or an "entrepreneurship program." The state determines the defini-tions of these terms.

Gov. Granholm first proposed the creation of NWLB during her 2007 State of the State Address. Shortly thereafter she introduced her 2008 Executive Budget which proposed the most expensive state government spending plan in Michigan history and what would eventually become a $1.358 billion tax hike to pay for it. A brand new $40 million general fund appropriation for her proposed NWLB program was included in the request. In the acrimonious political environment resulting from the tax proposal, some lawmakers did not welcome the prospect of creating brand new spending programs.

A spokesman for Senate Majority Leader Mike Bishop, R-Rochester, observed that asking "for new expenditures to pay for free college for some people while other families are being forced to pay higher tuition costs — that just doesn't make sense." He also noted that making the request for the money "just shows again that the state doesn't have a taxing problem, it has a spending problem."

State Rep. Jack Brandenburg, R-Harrison Twp., is a member of the House subcommittee that considered "No Worker Left Behind." Explaining his decision to vote against giving it $40 million from the general fund, he noted: "I truly believe this program should be left behind."

The governor's total initial funding request for NWLB was $77 million, $37 million of which was redirected federal dollars coming in to the state. In the end, reluctant lawmakers declined to approve any of the $40 million appropriation from the state's general fund, but did allow the reallocation of federal funding in the fiscal 2008 budget for the program's creation.

This year, in her 2009 Executive Budget proposal, the governor once again requested a $40 million direct subsidy from Michigan taxpayers for NWLB. The Legislature was more accommodating this time, allowing the general fund appropriation to increase from zero to $15 million. As noted above, this new spending item represents more than half of the $27.5 million general fund increase in the 2009 DLEG budget.

State Rep. Jack Hoogendyk, R-Portage, voted against the budget, in part because of the added NWLB funding. Laying some of the blame for Michigan's unemployment troubles on the growth of government and new programs, he calls NWLB "wasteful and wrongheaded," and akin to "trimming the front hedges while the house is on fire." Hoogendyk suggested that "hundreds of thousands" of jobs could be attracted and retained if the state instead overhauled its tax, regulatory and labor policies.

In the House of Representatives, Hoogendyk was one of 34 lawmakers — all Republicans — who voted against final passage of the 2009 DLEG budget. Seventy-three representatives, including 16 Republicans, voted for the proposal. Eighteen Republicans in the Senate and 16 Democrats voted for this budget. Only three senators, all Republicans, were opposed.

The MichiganVotes.org vote tally for House Bill 5809, the bill creating the 2009 budget for the Department of Labor and Economic Growth, is below. Find the contact information for all lawmakers at www.mackinac.org/9313.

For additional information and an opportunity to comment on this issue, please see www.mackinac.org/9795.