Tag: Sheila Weinberg

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Accountability general freedom government transparency incumbents initiative, referendum, and recall local leaders political challengers

Initiative Surplus?

Truth in Accounting, TIA, Financial State of the States, Sheila Weinberg, initiative, democracy

Only nine out of 50 states can pay their bills and meet their obligations; 41 cannot, barring major tax increases or spending cuts.

That’s what we learn in last month’s “Financial State of the States” report from Truth in Accounting (TIA).

Alaska is in the best shape, “with $11 billion in assets to pay future bills”; New Jersey’s in the worst, needing “to come up with $208 billion in order to meet its promised obligations.”

Sheila Weinberg, TIA’s founder, works hard to counter governments’ creative accounting. It’s trickery, really, which “would be considered criminal for private sector corporations.” One gimmick is “promising to pay employee benefits in the future, but not fully funding the benefits programs as they rack up obligations.”* 

Thankfully, TIA’s financial analysis includes items such as already-​made pension and healthcare commitments. 

Now, let’s expand the analysis, collating these findings to separate between initiative and non-​initiative states**:

  • Seven of the nine states with a “taxpayer surplus” — where government can pay its bills and meet its obligations — have the ballot initiative process. 
  • The 23 initiative states comprise 46 percent of the states. Yet, initiative states comprise a whopping 78 percent of financially healthy states. 
  • Of the 20 states carrying a larger-​than-​average taxpayer burden, 15 states (75 percent) lack the initiative process.

Granted, this represents a correlation between states with citizen-​initiated ballot measures and healthier fiscal policy, not necessarily causation. Still, I’m not surprised states where citizens have more say so are better governed.

This is Common Sense. I’m Paul Jacob.

 

* “This short term fix allows governments to artificially ‘balance their budgets’ by not counting certain obligations as official debt.”

** There are 23 initiative states and 27 non-​initiative states. Two referendum-​only states— Maryland and New Mexico — are considered non-​initiative states, and so is Illinois. Illinois is considered a non-​initiative state, because its ballot initiative process is so severely restricted as to be non-​existent. Only one measure has ever appeared on the ballot. 

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Categories
Accountability government transparency too much government

The Liability Behind the Curtain

Do not look at the liability behind that curtain! Or: Do not mention that we don’t know what the liabilities are.

Some things are too painful to report.

Apparently.

The folks who audit the Social Security Administration are late on a set of reports. The reports in question account for the financial and actuarial (un)soundness of Social Security, specifically on the (un)funded liabilities of the pension system and Medicare.

Unlike corporations, which are required to report to the IRS on March 15 each year, and individuals, who must report on April 15, there’s no set date for the trustees of our federal government’s biggest program to make its report. But in recent years the reports have been published early enough to allow summary by May. The last report summary we have is for 2009.

Why so late?

Could it be that things have gotten so bad that it’s difficult to figure out — and embarrassing to sign one’s name to — the actual financial situation? After all, this year Social Security ran out of money to write checks for its promised (and quite immediate) pay-outs.

Sheila Weinberg, CEO of the Institute for Truth in Accounting, writes that she heard the reports were late because “trustees wanted to include the effect the health care bill had on these liabilities.” Ms. Weinberg not unreasonably challenges this rationale. Wouldn’t Social Security’s liabilities have been worth knowing before Congress committed to more entitlement spending?

This is Common Sense. I’m Paul Jacob.