The state has been cooking its books. Microwaving them, actually. On high — 1,200 watts.
Now, you may have been laboring under the impression the state is living within its means. Because that’s what our leaders have been telling us.
Actually, Truth in Accounting says it’s worse than the state simply owing millions upon millions in bonds.
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For years, it has kept its pension and retiree health-benefit liabilities out of the equation, but now the accounting standards have changed and it must report it all.
Still, Mississippi chose to use its 2014 pension numbers even though its larger 2015 numbers were available when figuring whether its budget was balanced.
There’s undoubtedly an accounting term for such a maneuver. Around here, it’s known simply as slippery.
The problem with such problematic bookkeeping, according to Sheila Weinberg, who started Truth in Accounting to call out bad practices by the state and federal government and otherwise rile up the taxpayers, is the chickens eventually come home to roost. And they are not the golden egg–laying variety of poultry.
This means, at the end of the day, the time of day when chickens tend to roost, it will be the taxpayer who’ll be in debt. And taxpayers also cannot to my knowledge lay gold or silver, but they will experience something about as painful as an egg coming out of ... you get the idea. There will be much loud cackling.
Weinberg’s group figures the total bill owed is about $11,800 per taxpayer. It arrived at that figure by subtracting the state’s assets, $5 billion (which doesn’t include $19.6 billion in buildings, roads and such that it probably shouldn’t sell to pay its bills), from its bills, $13.4 billion, and dividing by the number of taxpayers, 711,864. Strangely enough, she defines taxpayer as someone who filed a federal return AND owed taxes.
But, you say, the state by law has to balance its budget, and anyway, the governor says you naysayers are nothing but a bunch of liberals. Actually, I prefer the label messenger, so don’t shoot. And, Weinberg says, the state law has considerable wiggle room.
“We proposed what we call fact-based budgeting, so they have to include all costs they incur whether they pay them or not,” she said. “The pension and retiree health benefits are compensation. They occur every year, but because (lawmakers) don’t fund all of it, or haven’t had to fund all of it, they don’t include it all in the balanced budget calculations.”
In other words, the state isn’t paying enough into its pension plan. But there is no escaping that debt to its employees and retirees. One day, it will have to pay. And the longer it puts off properly funding its pension plan, the more discomfort the taxpayer will feel when that day arrives.
She said telling the residents the budget is balanced gives them a false sense of security. All, to paraphrase her, is not well. Having a whacked-out budget leads to bad roads (one of the first indicators budgeting has gone astray), slumps in housing prices and a lower quality of life, Truth in Accounting says.
Moody’s, a company that makes it its business to pick winners and losers, is worried about Mississippi.
“We believe the state’s economy will continue to grow at a pace slower than the rest of the nation, leading to ongoing fiscal stress,” it wrote in August. “The state will likely address these issues with further budgetary discipline, but also through use of one-time revenues, like the rainy day fund, which could leave it with less financial cushion than peer states.”
Budgetary discipline. Is that when you cut the budget two months into the fiscal year?