A new study by Truth in Accounting shows that Texas’ record of publishing transparent and accurate government financial information has worsened over the past five years.

The state received an 80 out of 100 rating in 2019. It dropped to 77 in 2020 and has stayed at 73 in both the 2022 and 2024 TIA studies. Data for 2023 was not collected.

TIA’s study is based upon information disclosed in state budgets and other “best practices” used to improve government transparency and accountability. The data is accessible through states’ annual comprehensive financial reports.

The largest criterion that TIA uses to rank states is whether they received a recent clean opinion from an independent auditor for both the budget and the state’s largest pension plan. Fulfilling this criterion awards 50 points.

Next, 15 points are awarded if state financial reports include a net position “not distorted by misleading and confusing deferred items.” Another 10 points are given if all retirement liabilities are listed, and 10 more if it is published within 100 days of the fiscal year-end.

Minor points—in increments of five—are also awarded if the relevant data is easily searchable, the independent auditor is not a state employee, and the net pension liability is measured using an updated annual report.

The points administered are not all-or-nothing, as some states fulfill part of a criterion, but not all of it. Other issues, such as how states handle “deferred inflows and outflows” and hidden retirement liabilities are also considered.

“The Transparency Score for State Governments provides valuable insights into the financial reporting practices of states, encouraging greater transparency and accountability,” stated TIA CEO Sheila Weinberg. “We hope this report will catalyze states to enhance their financial reporting practices, ultimately benefiting citizens and policymakers alike.”

Texas specifically received a zero on its reporting of net position distortions, meaning that its report contained misleading and confused deferred items. It also received a six on its timeliness and did not use an external auditor, resulting in a zero for that criterion.

The main reason for Texas’ change in score from 2021 until 2022 and 2024 was the TIA’s decision to award 15 points instead of 10 points for how net position distortions are handled.

Between 2019 and 2021, the main difference was that Texas used to be more transparent on its net position, receiving four points in 2019 and zero in 2021. Texas still has a zero in this criterion in the latest report.

Texas Scorecard has previously reported on the state of financial transparency in Texas, notably on its cities and the evasion of local officials from open records requests regarding their financial statements.

James Quintero, head of the Texas Public Policy Foundation’s Taxpayer Protection Project, recently told Texas Scorecard that although Texas’ transparency standards were ahead of their time when they were first passed, they have since been hollowed out.

“One key challenge today is that the law is no longer geared toward a presumption of openness. Instead, it provides governmental entities with many different avenues to withhold public information, either in whole or in part,” explained Quintero.

Luca Cacciatore

Luca H. Cacciatore is a journalist for Texas Scorecard. He is an American Moment inaugural fellow and former welder.