A 2015 rule enacted by the Governmental Accounting Standards Board (GASB) requiring state governments to report full pension liabilities on financial reports reveals Mississippi to be in debt to the tune of $8.6 billion.
Did you think Mississippi state government is “required to balance the budget every year?” No doubt the politically in-tune public has heard that mantra more than a few times. But that simple statement, while technically true, conceals the ways lawmakers hide deficits.
Paying today for the actions of yesterday only means the government projects implemented today won’t be paid for until tomorrow.
If state taxpayers were forced to pay-up to cover the amount of unfunded debt for pension liabilities it would cost us each $11,900. That figure is up a hundred dollars more per taxpayer in Fiscal Year 2016 than it was in FY 2015 according to a recently released report by Truth In Accounting. Since 2014, individual taxpayers share of the state government debt has risen $2,700.
The GASB Rule 68 forced state officials to stop hiding the pension liabilities by keeping the numbers off the state balance sheet. And even more clarity is coming down the pipe. A GASB rule for FY 2017, rule 72, will reveal an additional increase in pension liabilities by as much as $1.4 billion this time next year. That’s because the state must start including the cost of retiree healthcare in the Comprehensive Financial Reports, as well.
Incomplete financial reporting from the Legislative Budget Office caused a minor disturbance on Twitter late last week when a report by Clarion Ledger political reporter Geoff Pender failed to credit state legislators with $1.6 million they did not spend in FY 2016.
But rather than add this amount back into the overall budget numbers, Legislative budget writers tucked it back into the upcoming FY 2017 Legislative Budget.
An attempted sleight of hand? Who knows? When the budget numbers get to flying things can get real confusing real fast. Add to that how the Legislative Budget Office, the legislative budget committee and the various agency reports don’t often reconcile and you have a recipe for the type of confusion that could provide cover for some officials to play ‘loose-and-goosey.’
Until now, politicians and government officials have been more than happy to take advantage of an accounting practice that kept the real costs of the state’s retirement system from upsetting a rosier picture.
To act as if these same political actors are suddenly struck with the honorable intentionrs to provide full transparency is searching for virtues where none have previously been glimpsed.
Trust but verify. Then verify again.
Or maybe just skip the trust part altogether.