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Tips for keeping an eye on public spending

By Kasia Kovacs 

TIPSHEET

View presentations from Joanna Lin and Cezary Podkul.

Journalists didn’t have to look far to prove that Illinois Congressman Aaron Schock was using taxpayer money to pay for surfing in Waikiki, parasailing in Argentina and renovating his office with Downtown Abbey flair.

All the reporters had to do? Check Schock’s Instagram account

The account was chock-full of selfies, some posing with celebrities like Ariana Grande, and others taken from the far corners of the world. According to the Washington Post, quite a bit of the funding for those trips came from campaign and taxpayer money.  

But politicians’ illegal spending habits can’t always be found simply by scrolling through social media.  

During the “Watchdogging public spending” panel, Mike Maciag from Governing Magazine, Joanna Lin from the Center of Investigative Reporting and Cezary Podkul from ProPublica began by playing a Daily Show clip blasting Schock’s spending habits. But the speakers spent the majority of the time giving advice to fellow journalists on how to keep an eye on public spending when Instagram isn’t enough.

Maciag emphasized the importance of public employment and payroll spending. After all, a huge chunk of the workforce is employed by the public sector. 

If you ask the right questions, data about public employment and salaries can provide inspiration for substantive stories and investigations. For instance, reporters should:

  • Look for trends. How have employee costs changed over time?
  • Look at the flow of money. Is there a significant amount of money that’s been shifted from one department to another?

Reporters have several resources for finding this data:

  • CAFR (Comprehensive Annual Financial Report)
  • Payroll databases
  • Census surveys, especially from the Census of Governments from the U.S. Census Bureau

Lin also spoke about payroll, but she focused on public employees who give themselves hefty salaries made possible by, say, impossibly high property taxes and voter fraud (Robert Rizzo, anyone?).

How can you tell if a public employee is making an outrageous amount of money at the expense of taxpayers? Good question. Find data that answers the following:

  • Who are the public employee’s peers?
  • How do the peers’ salaries compare to that of the employee?

Doing this can be tricky. In some instances, you may have to contact local agencies directly to find that salary data. Another thing to keep in mind is the different socioeconomic realities of various towns and cities.

If you’re a statistician, you’ll need to do some linear regression analysis to detect whether that salary that seems like an outlier is really an outlier based on the municipality’s socioeconomic makeup.

(If you’re not a statistician, now would be a good time befriend one and add her to your team.)

And finally, Podkul asked the question: Where do governments get the money in the first place?

Well, a lot of that money comes from the municipal bond market, which can be used to build infrastructure and support other essential government programs. But some of those municipal bonds can also be abused and run cities or states into debt.

The five most common bonds that drive governments and school districts down into a deep debtor’s valley?

  • Capital appreciation bonds
  • Pension obligation bonds
  • Moral obligation bonds
  • Bond guarantees
  • Borrowing to build budget holes

If you see your government borrowing from the bond market, that idea light bulb hovering above your head should immediately start glowing. You might find that, hey, maybe your city or state isn’t in great fiscal shape. Dig further to find out why. 

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