Make Local Government Great Again
Mandatory Transparency in State and Local Spending Is Good Government. Is DOGE the Key to This Enduring Reform?
The old saw that “sunlight is the best disinfectant” hints that if the public knew what government was doing in private, that the government wouldn’t (generally) do it at all. That principle is in large part why the latest Continuing Resolution just went down in flames in Congress; when the public found out that this “urgent” legislation was being used to recast criminals as “justice involved individuals” and fund the continuation of the federal government’s censorship complex, our representatives were properly embarrassed by the spectacle and went back to the drawing board.
Transparency and notice in government spending is, as it turns out, important to a functioning democracy. Go figure.
The importance of transparency and notice in government spending doesn’t end with the federal government. In fact, state and local government spending deserves as much attention as federal spending because not only is state and local government closer to the people, but they collectively spend almost as much as its deficit-spending governing partner in Washington. Before federal spending completely detonated with the onset of COVID-19, for every $6 the federal government spent, state and local government typically spent $4; or, if American governance spent $10, the trend for decades has been that almost half of that was spent by state and local actors. We’re talking about trillions and trillions of dollars that aren’t typically included as part of the federal spending, transparency, and reform conversation.
There are a lot of reasons government spending looks like this. The federal government can, of course, print its own money and spend the country into debt every year. In contrast, state and local governments, generally, have to balance their budgets. But federal grants can be an incentive to pump up state and local spending that might not otherwise happen, using local decisionmakers as sockpuppets for federal prerogatives funded by endless debt. When you subsidize a thing, you tend to get more of it, and federal grants subsidize all manner of dubious state and local spending that probably wouldn’t exist without it.
State and local spending, of course, have their own brands of tax-and-spend largesse independent of the federal government. State tax credits and local tax incentives push the cost of governance onto non-favored taxpayers, using private actors as vessels for public policy priorities. Yes, privatizing activities that government shouldn’t be involved in anyway — like running the post office — is a good thing, but using the tax code to favor some private actors over another isn’t privatization; it is, generally speaking, cronyism. And that largesse is subsidized, directly and indirectly, by federal largesse.
Moreover, profligate cronyism at the state and local level is just as bad, if not worse, than the federal level. The main difference is the degree of attention that spending gets. There are over 300 million people watching how one federal government spends money. There’s markedly fewer citizens watching how states spend money, and even fewer watching cities, counties, and taxing districts — even though, in the aggregate, state and local spending nearly matches what the federal government doles out. And as the jurisdiction size shrinks, the laws tend to be weaker and less responsive when bad actors in government might otherwise be found out.
Fortunately, there are solutions if there’s a will to pursue them. The preferred solution would, of course, not involve federal intervention at all, but would require motivated state legislators to pass laws requiring that local government records, especially spending records, be published online as soon as the money is spent. Think of it like a government checkbook; In fact, the federal government and some states already have programs like this in place for themselves. States should supercharge these practices and apply them to all of their political subdivisions — subdivisions which exist as practical conveniences to the state to serve its task of protecting the rights of its citizens.
Unfortunately, state politics is often internally incestuous in ways that the federal government is not. Legislators and state executives often are ascended from positions in local government, with all the bad habits and bad policies local government inculcates and prefers. When it comes to local government reforms, then, state legislators are often disinclined to participate, because once upon a time, they were local legislators.
That leaves the most realistic, and potentially best, option for comprehensive transparency and reform in government spending: the federal stick. The “Department of Government Efficiency,” or DOGE — a serious albeit unofficial reform group headed by Elon Musk and Vivek Ramaswamy — has been tasked by President-Elect Donald Trump to “provide guidance to the White House on spending cuts, and compile a list of regulations they believe are outside agencies’ legal authority."
While that framework might seem to imply a generally agnostic view to state and local government, in fact it’s the opposite; much of the waste, fraud and abuse Musk and Ramaswamy will find will center around the sorts of grants that state and local governments lobby for. Those grants affect state and local spending, which affect state and local priorities, and policies, and laws, and what they lobby the federal government for… you get the point. It’s the opposite of a virtuous circle; it’s a vicious cycle.
DOGE cannot be successful in its presidential charge if its only interest is the 60% of spending in American government being spent by the federal government. It has to take seriously the impact of the remaining 40%, prodded by federal grants and inextricably connected to the interests of good governance.
In practical terms, that means DOGE needs to not only consider the reform and cutting of federal grants, but it also means that of what remains, there should be new requirements on recipients to publish their activities as a condition of receiving federal cash. And given Musk’s ability to marshal the best minds to his projects, establishing a new, unified accounting reporting system that extends from the federal government to the local fire department would be immensely useful for Americans looking to see what’s being spent and why on every level of government. This isn’t a takeover of state and local governance by the federal government. It’s the establishment of transparent guardrails as a prerequisite to access federal funds. The federal government has full power over its own purse; it should use it to the benefit of American taxpayers, wherever they live.
When a clear and consolidated accounting of trillions of dollars in American government spending is largely unavailable to the public — thanks to politics and fragmented transparency practices among state and local government — the opportunities for reform are extraordinary. The federal government has its problems, but I hope as DOGE starts addressing them, they prepare the ground for mini-DOGE initiatives for state and local governments nationwide. It won’t be successful if it doesn’t.