Citizens’ ability to understand how their tax dollars are spent is fundamental to democracy. 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.

State and local governments spend billions of dollars every year on economic development programs in the form of forgone tax revenue and direct cash grant payments to corporations in an effort to stoke investment and job creation in a particular city, state or industry.

A review of economic development subsidy reporting in all 50 states finds that a majority of states fail to meet minimum standards of online transparency, leaving residents, watchdogs and public officials in the dark about key public expenditures. States should shine light on economic development subsidies by requiring the online publication of key transparency reports and inclusion of economic development spending in the state’s online checkbook portal to meet the expectations of citizens seeking information in the 21st century.

Economic development subsidies – be they tax exemptions, credits, or direct cash grant payments – are a form of public spending, but are rarely held to the same transparency standards as other government expenditures.