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Government Money and Citizens’ Trust
A tale of revenues, expenses and the key role they play in a democracy
by Robert Inzer
I’d like to provide a completely different perspective on why your city’s finances are important. There are a few givens. You already know that you are required by law to annually adopt a balanced budget. You know you need reserves for unexpected events (hurricanes, environmental disasters, pandemics, etc.). You know you want to monitor how much you are spending to hold your managers accountable for the resources you’ve provided them. You know you don’t want anyone stealing, so internal controls are important. What you may not have considered is the role municipal finance plays in supporting democracy.
I’ve spent almost my entire career as a municipal finance professional, working first for the City of Tallahassee as city treasurer and then as clerk of the court and comptroller for Leon County. I recognized the importance of municipal finance as an important and necessary tool to govern but never thought of it as necessary for a democratic society. That all changed for me in the early 1990s.
I was in my office in 1992 when I received a call from the Conference of Baltic States asking me to do training for newly elected municipal finance officers in Druskininkai, Lithuania. While I was well aware that the Berlin Wall had fallen in November 1989 and that the Eastern bloc countries were gaining their independence from Russia, that was about all I knew.
I advised them that they had made a mistake, that I could hardly find Lithuania on a map. I was generally unaware of their history, culture and governance and could not speak the language. In short, I had nothing to offer them. Before they would take no for an answer, they suggested that I listen to what they wanted me to talk about.
They advised me that communism, at least that practiced in the former Soviet Union, was a corrupt system. Everything was controlled by the federal government; local governments had no authority and were nothing more than instruments for the federal government. There was no budget or at least no budget that the citizens had access to. Citizens didn’t know where the government’s money came from or how it was spent. They had no input into their taxation, fees, charges or how the money would be used.
There were few if any internal controls, and stealing and payoffs were the norm, not the exception. Services were often controlled by whom you knew or your willingness to pay someone under the table to obtain them.
Citizens had no roles, responsibilities, information or process to be involved in their government. The communist government exercised control over citizens’ private and business lives.
The Baltics countries of Lithuania, Estonia and Latvia were establishing new democratic states. Unfortunately, they had been controlled and governed so long by the former Soviet Union, which limited travel and their access to information, their only knowledge of governance was what they had experienced under communism.
After more than 200 years of democratic government in the United States, we take democracy and our freedoms for granted. It is easy to assume that everyone around the world thinks as we do: that they want and expect their government to be accountable and transparent and provide them with the opportunity to be informed and involved in their country’s governance.
We forget how much of what we have been taught has evolved since 1776. We take it as a given that we have the right to know where our government’s money comes from and how it is spent. We accept that all citizens are free and equal and have the same rights to services and protection.
The Constitution of the United States paraphrases John Locke when it says: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. – That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed … .” A democratic society cannot exist without the consent and support of the governed.
As someone who had been a practicing municipal finance professional, I had never thought of the role that municipal finance plays in supporting and maintaining democracy. It is the budget that communicates to the citizens where the money comes from and how it is spent. It is the annual audit that provides independent confirmation of the revenues and expenditures. It is the financial internal controls that minimize the risk of theft, corruption and waste. It is the Comprehensive Annual Financial Report that provides metrics of activities and background information for citizens to understand their government’s financial condition. It is the free and easy access to all of this information that provides accountability and transparency. Without each of these, our citizens could not have the information to be involved or to trust their government.
When the Conference of Baltic States said they wanted me to teach the role of municipal finance in a democratic society – that I didn’t have to know the language, history, culture or governance but needed to be able to describe how each of these features was important and integral to their future success – I could not say no. So, in 1992, I spent one week teaching newly elected municipal professionals their roles and responsibilities in these newly created democracies. I’m sure I learned more than I taught as they told me horror stories of their experiences under Soviet control.
Commissioners, mayors and other elected officials are always working to gain the respect and support of your citizens. Make sure that citizens’ concerns are on the appropriate policy, not on the integrity of the government. The citizens should be debating whether to build a road or a park, hire new police officers, improve drainage, raise or lower taxes, etc. … and not distrust where the money came from or where it was spent.
Democracy is fragile. We’ve witnessed how it has emerged and been corrupted and replaced in many other countries. Keep in mind that it is not a given that it will always be the form of government in the United States. Our continued vigilance is required to maintain, support, defend and enhance the freedoms we enjoy and take for granted. Your local finance professionals are doing their job and need your continued support.
Robert Inzer is an advisor to the Florida League of Cities. He has 46 years of municipal finance experience that includes 30 years with the City of Tallahassee, 20 years of which was spent as city treasurer-clerk.
