Government Accounting or Criminal Conspiracy


The 2011 Union County audit is finally out and Note 15 on OPEBs is garbage*.  I could go into detail on that item but instead, let’s examine the stakeholders that maintain this dysfunctional system of reporting liabilities: accountants,  actuaries, rating agencies, municipal bond buyers, politicians, taxpayers, regulators, public employees.  None have an interest in revealing the truth.

Accountants: Imbue a simple subject with jargon to make work for your profession leaving only ‘experts’ able to understand what the numbers really mean and everyone else to pretend to know.

Actuaries: Brown & Brown got $20,000 in 2009 for a rehash of the county plan and one spreadsheet that the county has been using ever since recasting projections as reality.

Rating Agencies: When Union County went into the bond market a rating agency reviewer asked about OPEB costs and got a one paragraph email with junk numbers.  AAA+ rating came a few weeks later and two checks for $20,000 went to the rating agency shortly thereafter.

Municipal Bond Buyers: Assuming that taxpayers will always pay the tab, however high.

Politicians in Office: Who didn’t get where they are by asking questions of campaign donors.

Taxpayers: Seeing their jobs as done after casting their ignorant votes and expecting the puppets they anoint to watch out for them.

Local Finance Board: Rubber-stampers facilitating thefts through providing the appearance of regulation.

Public employees: If honest costs were reported to taxpayers would they really be getting those benefits?

Unfortunately that covers pretty much everybody.  We’re all in on it.

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* GASB rules forced Union County to do an OPEB valuation beginning in 2007 so they hired Brown & Brown for $20,000 for which they got a spreadsheet of projections that they have been using ever since reporting, for example, that they have $17,546,000 in assets as of 12/31/11 because that was what Brown & Brown projected there would be back in 2009 based on 2007 data.  On that same page there is another line that asserts that the “the County has made provision from budget appropriations and has reserved on its balance sheet the amount of $6,518,450.49 for future OPERB obligations.”  No explanation as to where that number came from.  However, the one number that the county accountants didn’t pull off from the Brown & Brown spreadsheet was the Net OPEB Obligation (NOO) which was projected to be $140,895,000 as of 12/31/11 (of course not including the 2011 OPEB giveaway) but in the audit the NOO is defined as the one-year difference between what was projected to be the ARC and what was projected to be the OPEB cost for the year .  Basically they could have picked up the page numbers from the Brown & Brown report and nobody would be the wiser.

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36 responses to this post.

  1. Probably the largest annual cost incurred by Union County is employees’ compensation. Included in employees’ compensation packages are benefits such as health care, life insurance and retirement benefits; such Other Post Employment Benefits (OPEB). These benefits are earned each day an employee works and the cost of these benefits accumulates every day as well.

    As OPEB benefits are have been earned and promised, a liability was created that must be paid sometime in the future. Prudent management demands that the value of this liability be estimated, and assets provided, to make sure the payments can be made when they come due.

    To accurately assess governmental accountability these payments and all compensation costs, including OPEB benefits, should have been included in the budget year they were incurred. In Union County the vast majority of these compensation costs have been pushed onto future taxpayers.

    To determine governmental accountability GASB mandated the County to obtain from actuaries an estimate of the unfunded liability that has been incurred to date. What the actuaries determined is the County has promised $550.6 million of health care benefits to current and future retirees, but only $17.5 million has been set aside to pay these benefits. To put these amounts into context the County would have to stop paying employees for more than 3 years and divert these funds to cover the $533.1 million shortfall.

    This means that if these promises are not altered future taxpayers will be burdened with paying the unfunded retirement promises plus interest without receiving any services for those tax dollars.

    This is in direct conflict with the concept of inter-generational equity. This concept suggests current taxpayers should pay for current costs, not push these costs onto future taxpayers.

    I leave it to you to determine why governmental accounting is so confusing.

    Sheila A. Weinberg
    truthinaccounting.org

    Reply

    • Posted by Tough Love on January 13, 2013 at 1:10 am

      Sheila, You said …” These (Pensions & OPEB) benefits are earned each day an employee works and the cost of these benefits accumulates every day as well. As OPEB benefits are have been earned and promised, a liability was created that must be paid sometime in the future.”

      I understand that as a accountant, you want to see full disclosure, accurate and complete Financial Statements. I also understand why you stated what I quoted above, but is that the end of your obligation or curiosity as a professional?. Give the financial mess many States and Cities are in, is it not appropriate to dig further into the causes of this mess?

      You might find that the ROOT CAUSE of the problem isn’t “funding” (which, when the time value of money is properly considered, just juggles the timing of the cash flows) but the extraordinary richness of the promised pensions and OPEB … easily multiples greater in value at retirement than that granted the typical similarly situated Private Sector worker.

      There is little doubt that this is the result of the collusion between the Public Sector Union and our elected representatives (the politicians)…. specifically, a trading of campaign contributions and election support for favorable votes on pay, pensions, and benefits.

      As a Private sector taxpayer, I find this unacceptable, and I strongly advocate for VERY SIGNIFICANT reductions in these excessive pensions, reductions in FUTURE service pension accrual rates for new and current workers ….. and in the many localities under financial duress (where further tax increases and/or further gov’t service reductions are unacceptable) PAST service pension accruals for both actives and those already retired should be reduced to the level (likely 50+% less) that would have been granted in the absence of the Union/Politician collusion.

      In essence, I do not agree (with your statement) that 100% of the promised Pensions & OPEB “must” be paid … or in fairness to Taxpayers (incredibly betrayed by the politicians who should have been looking out for THEIR interests) “should” be paid.

      This blog focuses on NJ’s issues, and with funding levels (valued in a manner comparable to that used for Private Sector Pension Plans) likely near 50%, and locked in underfunding for 5 more years (i.e., NJ’s 1/7, 2/7, … contribution grade-in), reality and the math all but guarantees Plan failure.

      Your time would be better spent informing Public Sector Plan participants of the reality that awaits them and the need for VERY MATERIAL and immediate givebacks if their Plans are to have any chance of survival.

      Reply

      • Unfortunately since governments did not use truthful budgeting and accounting retirement benefits have accumulated without the taxpayers understanding the costs of these benefits as they accumulated. Fortunately GASB is now requiring governments to calculate how much retirement benefits has been accumulated so now people are focusing on these liabilities and related costs. And now a very few taxpayers are starting to demand change.

        It would have been nice if governments would have voluntarily or been force to be truthful and transparent. Then taxpayers could have made informed decisions about whether they wanted to elect officials who promised these benefits.

        Now we need to educate Union County taxpayers that $533.1 million of benefits have been accumulated, so they can decide if these benefits should or should not be paid. And if these benefits should continue to be offered to current employees and retirees.

        Reply

        • Posted by Tough Love on January 13, 2013 at 4:06 am

          The Moody’s changes will have a much greater impact than the GASB changes. as bonds yields that the State and Cities must pay are much more closely tied to Moody’s ratings tan GASB-prepared financials.

          Moody’s decision to discount Plan liabilities at 5.5% vs the Plan investment return assumption will raise borrowing costs considerably …. and likely lock the poorest-funded gov’ts out of the bond market completely.

          Reply

          • Posted by muni-man on January 13, 2013 at 11:57 am

            When the ratings downgrades really start in earnest, it will be interesting to see if major pension funds start quietly working their political channels to apply all sorts of pressure on the ratings houses to back off on the new, more stringent assumptions. The 5.5% discount is definitely a biggie. Should be interesting as increasing economic forces tighten the stranglehold on the funds. It’s not gonna let up either, just get worse.

          • Yes the rating agencies can have a greater impact than GASB.

            But I would like to understand the rating agencies process better. Don’t the rating agencies focus a great deal on the government’s ability to pay the bonds and interest? Don’t the bonds have to be paid first, before anything else, even before the retirement benefits?

            I have been told the rating agencies primary focus is whether the government has the tax revenue to cover the bonds or the capacity to raise taxes so the bonds can be covered. Don’t rating agencies give governments high rating just because one or the other of these is true? Do the rating agencies care whether the government has a penny to pay anybody beyond the bondholders?

            You can’t tell me the rating agencies haven’t knew for years the amount of unfunded retirement liabilities accumulating. Yet they still have given governments high ratings. Does this indicate that they care less about the financial condition of the government or its unfunded retirement liabilities, than whether the bondholders will get paid?

            Is it correct to assume rating agencies pay little attention to whether how much services or benefits will have to be cut or taxes will have to increase, as long as the government can raise the money to pay the bondholders?

            I put these issues in the form of questions, because I would like to understand this better.

            Thank you for providing me the answers.

          • My experience with ratings agency is limited to those bonds they reviewed from Union County and the reviewer in that case was clueless as to how OPEB works. Here’s blog with video relating to that:
            http://www.countywatchers.com/?p=5758

            I suspect this is not unusual and ratings agency take the word of actuaries (bought and paid for by their clients) as gospel since they have so much in common with them.

          • Posted by Tough Love on January 13, 2013 at 1:19 pm

            Shela, In the worst cases (and where Federal bankruptcy filings are allowed) who comes first, the bondholders or the retirees will be settled by the Federal Bankruptcy, likely overriding the State/City & Retirement Plan wishes. The BIG test case now in play now is San Bernardino, CA. where the city has been stiffing CalPERS (re required employer contributions) for quite some time.

            Notwithstanding Federal Court rulings, there clearly will be cities (and possibly entire States) where sufficient revenue cannot be freed up (via tax increases or further service cuts) to maintain minimum reasonable services (San Bernardino likely being one of them) and pay both the Bondholders and the pensioners. A wise court would spread the pain.

  2. Posted by Tough Love on January 13, 2013 at 12:11 am

    John, I’m surprised you included “Taxpayers” in your list of those who do not have an interest in revealing the truth. I’m, a Private Sector Taxpayer and I am doing my darnedest to get the truth out.

    Assuming that by “Taxpayers” you mean NON Public Sector worker taxpayers, the intelligent Private Sector Taxpayers should certainly have an interest in revealing the truth, as they should know that the level of promised benefits is the key issue, not the “funding” thereof. Taxpayer should want the truth revealed because doing so clarifies the extraordinary richness and high cost, and hence would ramp up demand to reduce these pensions to a more appropriate level …. such as that granted the typical Private Sector worker.

    By saying …”Taxpayers: Seeing their jobs as done after casting their ignorant votes and expecting the puppets they anoint to watch out for them.” …. you’re not taking about those with reasonable grey matter between their ears.

    Reply

    • I do mean taxpayers whose incentive is wanting services but not wanting to pay for them for which they will reward any scoundrel politician who says it can be done. I also would count myself in that camp except for that part about rewarding politicians.

      There are plenty of smart people out there – but on their own particular topics of which valuing OPEB benefits is rarely one. They need to trust and unfortunately those other groups can’t be trusted for one reason or another, though usually to do with money.

      Reply

  3. Posted by Javagold on January 13, 2013 at 1:29 pm

    they will continue to take as much as they can from us…………. UNTIL THEY CAN’T

    I look forward to the Great Reset

    Reply

    • Posted by Tough Love on January 13, 2013 at 1:54 pm

      As do I.

      Reply

      • Posted by muni-man on January 13, 2013 at 2:11 pm

        It’s comin’. These downgrades are gonna raise the decible level a lot; their options are shrinking more every day. If the spigot is effectively turned off for many, that will start the end game in motion.

        Reply

        • Posted by Tough Love on January 13, 2013 at 2:56 pm

          I’m not as optimistic as you (that there will be material change anytime soon). Never underestimate the greed of the Unions and the self-interest (and self-dealing) of the politicians …….. all to the detriment of Taxpayers.

          Reply

  4. Posted by Javagold on January 13, 2013 at 1:32 pm

    Can you imagine what is going to happens when people just stop paying property taxes, whether by choice or just not having the money……and now that most are underwater (literally from Sandy as well) walking away is even easier

    Reply

  5. I see a big change now in government compared to 1980 when I became an adult/taxpayer. It used to be the private sector workforce would get involved in government, run for office, get appointments. The pressure of the workforce now make it almost impossible for an IT worker, pharma researcher, etc to committ to endless 7 pM meetings, much less take phone calls during the day. Now all elected officials seem to be young lawyers(either sole proprietors who want to get their name out there or junior lawyers in large firms who have the blessing of partners to run and make a name for self and firm) or financial/insurance types looking to build their business. They have all the incentive in the world to give away the future pension payments knowing they will be long gone when the bill is due. You would be surprised to see how many get their families jobs in govt or education, or become commissioners once their term is over. The private sector offset to this greed has no teeth, the few who even get involved usually quit for “personal reasons” (i.e. their companies told them to quit govt or get fired

    Reply

    • Posted by Tough Love on January 13, 2013 at 3:49 pm

      In NJ it’s THAT (what you described) plus the game of accruing a pension service year for minimal time spent and then (once retired from your regular job), using your gov’t connections to get a full time high-paying job for 3 years and retiring with a Gov’t pension as though you were a full-time gov’t worker for a full career.

      This could easily be stopped by changing the $7,500 of pay minimum per year (recently increased from less than half that) to get a year of service credit to a definition that requires 1,000 hours of paid service in one Plan year (the definition used in PRIVATE sector Plans).

      But of course those in power won’t change it … self-interest at it’s best.

      Reply

  6. Posted by eatingdogfood on January 13, 2013 at 7:31 pm

    Hey; This Is About Money; And All The Worthless SOB’s Who Work For The Government !!! Pay Up, Or These Worthless Government SOB’s Will Throw You Out In The Street !!! Your Name May Be On The Deed; But You Really Don’t Own Anything !!! Just Another Way To Redistribute Your Hard Earned Money !!! Keep Voting For Democrats !!!

    Reply

  7. Posted by Al Moncrief on January 13, 2013 at 11:59 pm

    THE SOLUTION: FEDERALLY-SUBSIDIZED PUBLIC PENSION FUNDING BONDS FOR THE STATES.

    The habitual underfunding of public pension obligations by state and local governments has resulted in significant declines in public pension funding ratios in the last decade. Although most public pension funded ratios have not reached the 50 percent funded “neighborhood” common in the United States fifty years ago, a few state legislatures have reacted to declining pension funding ratios with attempts to breach public pension contractual obligations (notably, Colorado, New Jersey and Rhode Island.)

    Recognizing that vested public pension benefits are contractual obligations of their governmental plan sponsors it is clear that state attempts to escape their pension obligations will not survive court muster. Accordingly, in coming years, states will seek alternative means of reducing the burden of their accumulated public pension debt. In addition to the adoption of legal, prospective pension reforms, states should have access to federal assistance in meeting their public pension obligations. Federal policies to suppress interest rates in the United States have hindered the recovery of state and local public pension plan funded ratios. Federal public pension bonding authority would ensure that state governments receive some benefit from this federally-created low interest rate environment.

    Colorado legislators and members of Congress should lead the effort to make available federally-subsidized public pension funding bonding authority for state governments. Here are a few immediate steps that the Colorado Legislature and the Colorado congressional delegation should take to address state public pension debt:

    (1) The Colorado Legislature should adopt resolutions in the House and Senate encouraging Congress, the President and the Colorado congressional delegation to support the issuance of federally tax-subsidized public pension funding bonds to meet state contractual pension obligations. This bonding authority should be made available to states while the United States remains in a period of historically low interest rates. As an example, the federally subsidized Build America Bonds issued a few years ago provided federal government reimbursement of 35 percent of all coupon payments directly to the state. “The Direct Payment BABs provide a federal subsidy of 35% of the interest paid on the bonds to the issuer.” “According to the United States Department of the Treasury, the savings for a . . . 30 year bond are estimated to be 112 basis points versus traditional tax-exempt financing.”

    Link: http://en.wikipedia.org/wiki/Build_America_Bonds

    (2) The Colorado congressional delegation should champion federal legislation creating this state public pension bonding authority. If Congress can provide direct transfers of cash to major U.S. banks to alleviate the fiscal pain of the Great Recession, Congress can surely provide bonding authority to our states to relieve the financial stress of this recession (of course, much of this stress was self-imposed by the states through their irresponsible failure to meet actuarially required public pension contributions.)

    (3) The Colorado Legislature should commence planning efforts to reform the Colorado PERA public pension plan PROSPECTIVELY, i.e., legally. Unconstitutional pension reforms, such as SB10-001, simply delay true reform. The Colorado Legislature should find new revenues to meet its contractual pension obligations: closing corporate tax loopholes, consideration of levies on natural resource extraction, consideration of lotteries as a source of revenue to meet contractual pension obligations, funding Colorado PERA contractual obligations in lieu of discretionary transfers of state resources to meet Colorado local government pension obligations, termination of annual discretionary property tax relief until the State of Colorado is no longer in breach of public pension contracts, etc.

    It is clear that under the Colorado and U.S. constitutions, contracted public pension benefits are inviolate. In 1977, the U.S. Supreme Court (in U.S. Trust Co, 431 U.S.) clarified that state attempts to impair their own contracts, ESPECIALLY FINANCIAL OBLIGATIONS, were subject to greater scrutiny and very little deference because the STATE’S SELF-INTEREST IS AT STAKE. As the court bluntly stated:

    “A governmental entity can always find a use for extra money, especially when taxes do not have to be raised. If a state could reduce its financial obligations whenever it wanted to spend the money for what it regarded as an important public purpose, the Contract Clause would provide no protection at all . . . Thus, a state cannot refuse to meet its legitimate financial obligations simply because it would prefer to spend the money to promote the public good rather than the private welfare of its creditors.”

    Support public pension rights and the rule of law in the United States by contributing at saveperacola.com. Friend Save Pera Cola on Facebook!

    Reply

    • Posted by Tough Love on January 14, 2013 at 12:18 am

      No.

      Support VERY MATERIAL pension reform (i.e., BIG reductions) with the forcefulness and avarice equal to that which the Public Sector Unions and Workers have employed in financially raping the Taxpayers with their insatiable greed and grossly excessive pensions and benefits …. FAR FAR greater than what similarly situated Private Sector workers could eve dream of getting.

      Reply

    • Posted by muni-man on January 14, 2013 at 9:08 am

      Get your facts straight – there’s no contract breach in NJ because retirement benefits, pensions included, were NEVER granted contractual status under NJ’s constitution (per NJ case law). Thankfully, not all states rise to levels of total irresponsibility and ineptitude by granting their publics contractual retirement benefits. Co. may be tied up in knots over COLA crap, but it simply ain’t a problem here in NJ.

      Reply

  8. Posted by eatingdogfood on January 14, 2013 at 9:27 pm

    Democratic Hustler Politicians + Corrupt Greedy Unions = BANKRUPTCY BABY!

    Reply

  9. Posted by MJ on January 15, 2013 at 8:15 am

    The fact of the matter is that regardless of the constitutional status of pensions, benefits, etc. the reality is that no entity, not even the government can afford to pay individuals for 30-40 years of retirement, especially the overly excessive retirements of the publics. Just doesn’t add up no matter how the publics wants to spin it.

    Reply

    • Posted by Al Moncrief on January 15, 2013 at 2:34 pm

      MJ, it appears that you have little understanding of portfolio income. Millions of retirees in the United States live off of portfolio income, dividends and interest. This “entity” routinely supports retirees for 30-40 year retirements. In the case of public sector DB plans, the “government” is contributing twenty percent of this retirement benefit. Twenty percent is also contributed by employees as members of DB plans, and the balance is generated from portfolio earnings. When you perform a service for an employer, and you receive a paycheck from that employer, the funds you receive are your property. These funds that you have earned are not the property of your employer. For this reason, you can see that it is ludicrous to state that the “government” is “paying” for public sector DB retirements, when in fact these public sector employers provide only twenty percent of the benefit. In many cases, public sector employers have failed to provide even this 20 percent contribution.

      If you as an individual socked away 10 percent of your income for thirty years, and your employer matched this ten percent for thirty years, you would also have significant portfolio income to live on in retirement. Public DB plans work well, but only when public employers act responsibly and make their contributions.

      Reply

      • Posted by Anonymous on January 15, 2013 at 3:55 pm

        Al, you obviously have no grasp of reality but of course I can’t blame you for that being in the public cocoon. Few if any comparable private sector workers retire at age 58-60 and have their retirement savings last until they are in their 80s and 90s. Most of the elderly parents of my peer group are extremely concerned about their funds running out not to mention having to pay for additional health coverage to supplement Medicaid, ever rising taxes and fees, food costs , etc And these are the folks who worked into their late 60s and had good paying jobs and maintained retirement savings. Of course all you care about is that you get yours. Much crueler to keep the ponzi scheme going than to adjust now so that the publics have time to prepare.

        Reply

      • Posted by Tough Love on January 15, 2013 at 6:54 pm

        Al, Some time back Girard Miller debunked the nonsense that interest is a real “source” of funds to pay for the rich pensions promised Public Sector workers. It’s not. there are ONLY 2 contribution sources, the employee and the Taxpayers, and the employee’s contributions (INCLUDING all the investment earnings theeon) rarely accumulate to a sum at retirement sufficient to buy more than 10-20% of the very rich pensions promised them. The 80-90% balance is the responsibility of the Taxpayers via their contributions and the investment earnings on THEIR contributions, earnings would have stayed in THEIR pockets to benefit THEM in the absence of these obscenely generous pensions.

        Below is an example demonstrating my point…

        One way to look at it is that “pre-funding” (which creates the asset pool from which interest is earned) is simply a mechanism to change the cash flow pattern between 2 extremes (Lump sum pre-funding of all costs up front, and paying the costs as they occurs with zero pre-funding). Now consider the extreme lump sum pre-funding case ….. and say the promised benefit will be $1 Million payable in one payment 20 years in the future, and assume assets will earn 6%. Then a lump sum of $311,804.73 is required, because it would grow over 20 years to the $1 Million at 6% interest. Now suppose the split of costs between workers and Taxpayers is 25%/75% so the workers pay $77.951.18 and the Taxpayers pay $233,853.55. In THIS case YOU would argue that the Taxpayers’ cost is $233,853.55.

        At the other extreme, neither the workers nor Taxpayers pay anything until 20 years hence, and then the workers pay $$250,000 and the Taxpayers pay $750,000. I’m sure, in THIS example you would agree that the Taxpayer PAID $750,000 for the SAME fixed benefit that has been promised the workers.

        But how can that “fixed” benefit have 2 different costs ????

        Now lets try this ….. we indeed choose to make one one payment at the end of the 20 years, the Taxpayers’ payment being $750,000. But quietly on the side, the Taxpayers (huddle amongst themselves and put $233,853.55 into a 20 year bank CD with a guaranteed return of 6%). Well voila, that $233,853.55 has grown to $750,000 at the end of the 20-th year … of which $750,000-$233,853.55=$516,146.45 is earned interest. Now no one would argue that the $516,146.45 isn’t the Taxpayers’ money since it is in a CD in THEIR name.

        So, is there really a difference if they pay the full $750,000 cost at the end or put $233,853.55 in year 1 into a CD and earn $516,146.45 in interest to get to the same $750K, and THEN take it out of THEIR pocket and pay the bill ?

        Reply

      • Posted by Anonymous on January 15, 2013 at 11:49 pm

        Please keep in mind that the vast majority of governmental entities do not set funds aside to pay for future retirees health care benefits. So there are no assets to earn investment income.

        If the promises to retirees for health care benefits are not modified, then future taxpayers will have to pay them without receiving any corresponding government services. The retirees will have provided those services to people decades ago.

        Is the lack of government funding of benefits employees fault?

        Truthful budgeting would require governments to include the cost of the retirement benefits in the budget the benefits were earned as a part of current employees’ compensation. Then there would be money in the budget so it could be set aside fund to fund the benefits as they are incurred.

        This concept is essential to government accountability. As one US Treasury official once said, “Our elected officials shouldn’t have the pleasure of spending (get votes) without the pain of taxing (lose votes).” For too long state and local governmental officials have been not including all of the compensation cost in the budget. Therefore they have been able to spend without having to raise taxes. The cost have been pushed on to future taxpayers.

        We can’t hold are governmental officials accountable if they hid the true cost of government and don’t have to raise taxes to cover that cost.

        Reply

        • Posted by Tough Love on January 16, 2013 at 12:04 am

          Quoting …”Is the lack of government funding of benefits employees fault?”

          That’s addressing the symptom, rather than the cause. Unless Public Sector “cash pay” is lower than that of their Private Sector counterparts, there is no justification for TAXPAYER funding of greater pensions and better benefits.

          As for retiree healthcare, almost nobody in the Private Sector get this benefit any longer. As such, Taxpayers should not pay for this benefit for Public Sector workers. It has nothing to do with “funding”.

          And quoting …”Truthful budgeting would require governments to include the cost of the retirement benefits in the budget the benefits were earned as a part of current employees’ compensation. Then there would be money in the budget so it could be set aside fund to fund the benefits as they are incurred.”

          Exactly correct …. but the Public Sector Unions & workers don’t want and wouldn’t like this because the true cost of their pensions and benefits would then be exposed as clearly excessive, unfordable, and unnecessary to attract and retain a qualified workforce.

          Reply

          • Posted by Anonymous on January 16, 2013 at 12:37 am

            An informed electorate is the basis of our democratic governments.

            How can we demand Truth in Accounting and Budgeting for governments, so citizens know the true cost of their governments and be an inform electorate?

            Do citizens even know they are not being told the truth? Can we get enough of them to care?

            For years the citizens have been told their governments’ budgets have been balanced so they assumed everything was OK. Their governments were living within their means.

            In the meantime these retirement benefits were not being included in the budgets on the financial statements. The unfunded benefits just increased and increased. So now many governments are in financial crisis.

            The first step in solving the problem is to know where you stand. To help citizens understand the finances and other critical information about their state the Institute for Truth in Accounting has developed StateDataLab.org. Please check it out and let me know what you think.

  10. Posted by MJ on January 15, 2013 at 8:38 pm

    In case no one caught it, in IL the mayor’s advisory group found that retiree health benefits can not be sustained and recommended that changes be made as soon as possible. Me thinks the reforms will start here with the current and future retirees paying for their own health benefits. Once this happens, other states will follow along. Thus, of course stringing along the pension mess. All of this nonsense for what? Basic economics and market principles will take care of the whole thing one way or another.

    Reply

    • Posted by Tough Love on January 15, 2013 at 9:29 pm

      The free or heavily subsidized retiree healthcare is the “low hanging fruit” due to lesser “guarantees”. Eliminating or substantively reducing these subsidies should in no way lessen the Taxpayers” LEGITIMATE goal to reduce Public Sector “Total Compensation” (pay plus pensions plus benefits) to a level no greater than theirs (in comparable occupations or in occupations with similar risks and skill sets when a direct comparison is not possible).

      Right now, Public Sector “Total Compensation” FAR FAR exceeds that in the Private Sector, not generally via the cash pay component, but via pensions and benefits that are multiples greater in value at retirement than their Private Sector counterparts.

      Reply

  11. [...] Union County audit is finally out and Note 15 on OPEBs is garbage.  I could go into detail on how this is allowed to happen in an official document but instead let’s examine Union County’s role in what is likely unintentional [...]

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  12. [...] week I outlined how the Union County audit is fraudulent as regards their Note on OPEB Obligations. Tonight I brought my concerns to the freeholders and it got even [...]

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  13. [...] OPEB valuations in the county audit claim a trust fund amount that does not exist (O) [...]

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  14. [...] ·        OPEB valuations in the county audit claim a trust fund amount that does not exist (O) [...]

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  15. Hello, Neat post. There’s an issue with your site in web explorer, would check this? IE still is the market leader and a huge component to people will omit your great writing because of this problem.

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