Complexity is the enemy of transparency. Unfortunately for Texans seeking to hold their local governments accountable on fiscal issues, local budgets, and financial statements are hopelessly complex.
For example, the City of Irving’s annual budget is over 490 pages, which is longer than many fictional novels. Their “summarized” audited financials, otherwise known as the Comprehensive Annual Financial Report (CAFR), is slightly shorter at nearly 150 pages, but is chock-full of governmental jargon that requires an advanced degree to even begin to comprehend.
Local government budgets are so complex it can be incredibly challenging for many elected officials to decipher crucial financial information in a timely manner. As a result, they mainly rely upon city staff to inform their decision-making.
If elected officials have difficulty gaining meaningful insight into their own city’s financials, imagine the challenge it presents for Texas taxpayers.
It raises some interesting questions. If local officials and residents can’t understand their city’s financials, how can anyone begin to have a constructive debate over the appropriate level of spending, taxing and debt?
Furthermore, if local officials and residents don’t have the ability to compare and contrast the fiscal status of their city with others across the region, how can anyone identify a starting point from which to base a meaningful policy discussion?
The simple answer is—they cannot.
Over the next month, the Metroplex Bureau of Empower Texans will be releasing the results of our inaugural Local Government Snapshot analysis that measures city spending, taxation, and debt levels across North Texas’ fifty most populous cities.
Below are the top twenty cities with the highest combined spending from each city’s primary spending categories—Governmental Activity and Business-Type Activity.
It is important to note that these spending figures do not include total municipal spending found in city budgets. For comparison purposes, only core expenditures were analyzed by combining total “Governmental Activity” and “Business-Type Activity” as categorized in the CAFR. These figures include bond proceeds issued for one-time capital expenditures in the same fiscal year.
Expenditures categorized as Governmental Activity are generally consistent across many municipalities. They are paid for with revenue primarily from local taxation, and are used to finance core government services such as public safety, transportation infrastructure, general governance, courts, parks and other services. Not all cities offer an identical “bundle” of services, however.
Expenditures categorized as Business-Type Activities are generally consistent across many municipalities. They are typically paid for with user fees levied on residents, and are used to finance water, sewage, other utilities, and related infrastructure. Again, not all cities offer an identical “bundle” of services.
Note: Each city’s 2014 Comprehensive Annual Financial Report (CAFR) provided all information used in our benchmarking analysis, including population figures.
*Cities that did not have their 2014 CAFR published online were included in our analysis using data from their 2013 CAFR.
UPDATE: This article was updated on June 15th, 2015. Changes were made to terminology used to explain what constitutes total “core expenditures” in the LGS analysis, by substituting nomenclature taken directly out of the CAFR for the titles of “General Fund” and “Business Enterprise Fund.”