Congressional legislation to address the economic effects of the COVID-19 pandemic seems likely to contain federal funds to bolster state and local government budgets, most of which are facing sharp revenue declines. The costs of federal support for state and local spending exceed the likely benefits, but unfortunately, that has not stopped Congress from spending beyond its means in the past. After more than $3 trillion in relief this year, if Congress does move forward with even more spending, it’s important that any support program not reward or encourage fiscal mismanagement in state and local governments.

Requiring states to provide spending data to taxpayers and increase transparency in order to get relief funding is one potential way to encourage fiscal responsibility during the pandemic and beyond. This idea already has attracted some momentum and could include commonsense financial transparency requirements.