Texas Has Taken a Beating In Its Financial Transparency Ratings Since 2019
Jose Nino
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According to a new study published by Truth in Accounting, the Texas state government’s otherwise reputable track record of publishing transparent and precise government financial information has worsened in the last five years.
Texas received an 80 out of 100 rating back in 2019. However, that rating has been plummeting in the last few years, with it falling to 77 in 2020. It stayed at 73 in both the 2022 and 2024 TIA studies. Data for the year of 2023 was not gathered.
Texas Scorecard noted that TIA’s study uses information published in state budgets and other “best practices” used to boost government accountability and transparency. The data is accessible via states’ yearly financial reports.
One of the biggest metrics TIA uses to rate states is if they obtained a recent positive opinion from an independent auditor for both their budgetary affairs and the state’s biggest pension plan. By meeting these standards, TIA grants 50 points.
Subsequently, 15 points are granted if state financial reports feature a net position “not distorted by misleading and confusing deferred items.” An additional 10 points are granted if all retirement liabilities are put forward, and 10 more if they are published within the last 100 days at the end of the fiscal year.
“The Transparency Score for State Governments provides valuable insights into the financial reporting practices of states, encouraging greater transparency and accountability,” declared TIA CEO Sheila Weinberg. “We hope this report will catalyze states to enhance their financial reporting practices, ultimately benefiting citizens and policymakers alike.”
Texas received a zero rating on how it reported net position distortions. In other words, its report featured misleading and confused deferred items. On top of that, it received a 6 rating on its timeliness and did not use an external auditor, which resulted in it receiving a zero for that criterion.
The principal reason for Texas’ score change from 2021 until 2022 and 2024 was the TIA’s decision to grant 15 points instead of 10 points for how net position distortions are tackled.
From 2019 to 2021, the key difference was that Texas had more transparency with respect to its net position, which earned it 4 points in 2019 and zero in 2021. Texas still features a zero rating for this feature in the latest report.
Texas has built its reputation as a free market bastion. However, all of that is going to waste with how corrupt its ruling class has become complacent and willing to entertain interventionist policies on economic fronts.
These latest ratings should serve as a warning to Texas leaders that the state is moving in the wrong direction. And it’s high time that the state corrects course by embracing free market policies and fiscal restraint.
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