The “Data Coalition” is a group dedicated to streamlining government financial information, with a view to promoting transparency and lowering costs. Last week, the group hosted a summit in Washington DC, covering a variety of interesting topics.
One attendee stressed the importance of developing “machine-readable” financial reports for state and local governments. These reports, known as “CAFRs” (Comprehensive Annual Financial Reports), have a more-or-less standardized format, and are driven by governmental accounting standards.
But heavy-duty users know how unwieldy they can be, in trying to get historical data consistent across different jurisdictions. Machine-readable financial statements can make the aggregation and comparison of financial data easier.
As valuable as this future path could be, the need for machine-readable reports also helps illustrate the value of our “State Data Lab” website. We’ve already done the hard work of getting data, by hand, and putting it into an easy-to-use, consistent format.
Here’s an example. Illinois’s latest (and recently released) Comprehensive Annual Financial Report included a chilling update or two, including a reversal in the state’s recovery in “Net Revenue” (basically general revenue less net expenses, yielding a measure like “net income” in the private sector). Here’s a chart showing that trend.
Illinois’s net position (assets less liabilities, like shareholder equity in the private sector) fell significantly further in 2016, to a negative $127 billion, after a massive decline from (negative) $45 billion in 2014 to (negative) $121 billion in 2015.
But the massive 2015 decline was mainly the result of a change in accounting standards, with the tardy recognition of a new (and very large) net pension liability on the balance sheet. The change in accounting is welcome, and a change that Truth in Accounting has called for for a long time. But the change in accounting makes it a little more difficult to understand the trend in results, given the discontinuity in the data.
This also helps underscore, however, the value of our State Data Lab website. We’ve been tracking the net position of all 50 states on a consistent basis since 2009, using a method the accounting standards are evolving toward.
Here’s a look at our bottom-line “Taxpayer Burden” for Illinois from 2009 to 2015. We will finish our analysis of Illinois’s 2016 finances soon, and will update our database then.
Meanwhile, here are three pretty pictures from my trip to DC – the view from my hotel room, a picture of the statue of Albert Gallatin right in front of the U.S. Treasury building, and, across the street, PNC Bank – what is now PNC Bank, anyway, after the infamous Riggs Bank went out of business (a longer story).
