Transparency in Local Authority Budgets

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Dr. Tehilla Shwartz Altshuler discusses the challenges to transparency in the budgets of Israel's local authorities, including the need to make budgets accessible, to enable searches within budgets, and to facilitate comparisons between the budgets of different authorities.

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The debate over the reliability of recently published reports that compare per capita budgets inside the Green Line to budgets of settlements over the Green Line reflects a problem that has nothing to do with the occupation. Rather, it reflects a lack of transparency in the budgets of Israeli local authorities. This lack of transparency has direct effects: it increases the temptation for graft, reduces the ability of the regulator (the Interior Ministry) to discover and deal with local government management failures in real time, and, of course, hinders the ability of citizens to know what is going on in their own backyard.

The lack of transparency in Israel's local authorities also impairs our ability to conduct serious discussions on the State of Israel's priorities in general. This is because the connection between the funding allocated in the State budget and the level of services citizens receive—in areas such as education, welfare, sanitation, and culture—varies from local authority to local authority. For example, we can debate about the cuts to the Education Ministry's budget, but it is only when we pool all the education budgets of Israel's local authorities and differentiate between “core” expenses on education and expenses for auxiliary services, such as transportation and school security, that we can determine what the actual education budget of the State of Israel is. Once that is done, we could also investigate how much of the local education budget comes from the State, how much comes from local property taxes, and how much comes from other revenue sources; which local authorities have established matching programs with the central government; and which authorities—which simply do not have funds for matching—will forever lag behind.

It may be argued that many local authorities have their budgets available in their offices or make them accessible on their websites. The response to this is that transparency is not just a matter of making information available; first and foremost, it requires clear rules for organizing the information. Currently, the Interior Ministry officially uses guidelines from 1995 that outline the desired structure for presenting local budgets; however, close examination reveals that there are dozens of variations on these guidelines, which range from being very faithful to the original to being completely different. Moreover, the guidelines apply only to the regular budgets of the local authorities; the Interior Ministry has never published guidelines that would standardize the presentation of “special budgets”—that is, the development budgets of the local authorities. These special budgets are what makes it possible to select contractors and cheat the system. It is imperative to formulate such guidelines as soon as possible.

The greatest challenge to transparency in the budgets of local authorities is to be able to compare them. Even after the introduction of a standard format for presenting local budgets, intensive work will be necessary to define metrics that will permit comparisons between the budgets of the different authorities, which will take into account their socioeconomic cluster, the size of their territory, the type of local authority (city, town, regional), the location of garbage bins, whether they have a regional fire station or landfill, etc. These indices, some of which may already exist in the Interior Ministry, must be transparent and clear to the public.

Furthermore, transparency is not merely offering a printed copy of the budget book or files with scanned pages from it; rather, transparency demands that the budget be made available in Excel files that will enable people to dig below the surface, search inside, and present the data in interesting graphs. We must remember that even getting to the point that we are at today—at which municipal budgets are available in a machine-readable format—required going to court. In addition, transparency requires not only presenting the budget in an open format, but also adding explanations to the various items so that all citizens, and not just experts, will be able to understand what is concealed behind each budget line.

During the last year and a half, I have been directing a pilot project, conducted together with the Public Knowledge Workshop and in collaboration with Google Israel, which is aimed at building a system that will make local authority budgets accessible. This system will be launched online in a few weeks and currently includes the budgets of five local authorities. The new system will make it possible, for the first time in Israel, to search within budget items, compare the approved budget with actual spending, and make comparisons between authorities. This is a first step in plugging the black hole of the lack of transparency in Israel's local authorities, and will make it possible, among other things, to conduct critical and objective discussions about Israel’s priorities. 

Dr. Tehilla Shwartz Altshuler heads IDI's Open Government project and Media Reform project.