Truth In Accounting Update
February 17, 2010 | Filed Under Chicago, Illinois, Truth in Accounting, Warner Todd Huston | Comments Off
From the Truth in Accounting folks…
Illinois Budget Transparency Group Makes Recommendations to Springfield Legislators
This past fall, Sheila Weinberg and Ralf Seiffe met with the Illinois House Bi-Partisan Task Force on Budget Reform in Springfield to discuss the views of the Illinois Budget Transparency Group on ways to refine the calculation of Illinois’ annual budget.
The Illinois Budget Transparency Group, which includes Americans for Prosperity, Illinois Policy Institute, Taxpayers’ Federation of Illinois, Center for Tax and Budget Accountability, Illinois Business Roundtable, Heartland Institute and the Institute for Truth in Accounting, also met several times this fall to find common ground on the calculation of the “real” Illinois budget deficit.
The group discussed what items should be included in state revenues, and what items should not, including the sale of state assets, proceeds from loans and locally imposed taxes. Accordingly, state expenditures should include debt service on loans, interest on pensions and unpaid bills from past years. The group also discussed various ways of reporting other post employment benefits (OPEB).
The Illinois Consolidated Annual Financial Report (CAFR) should be produced within 90 days of the fiscal year end.
The amount of data, the relative scale of the state’s financial operations and the reporting systems make it difficult to grasp the state’s annual shortfall or its accumulated deficits. The Institute will begin to develop recommendations for changes to the budget process which reflect the group’s findings. One objective is to create a model to be applied to the state’s 2011 budget. These findings will also be incorporated into an ongoing project on transparency sponsored by the State Policy Network.
Truth in Accounting Act of 2010 Introduces in Springfield
This past winter, the Institute worked with State Representative Mike Tryon (64th District) to draft legislation which would improve the budget and financial reporting processes of Illinois state government. The resulting Truth in Accounting Act of 2010 was proposed to the state legislature on February 3rd.
Highlights of this proposed legislation include:
- The state’s Comprehensive Annual Financial Report will be required to be produced within 90 days after the state’s fiscal year end;
- State budget calculations will be required to clearly distinguish state revenues earned from other funds used to balance the budget, such as loan proceeds;
- State budget calculations will be required to identify all costs incurred during the budget year, including those which will be paid in future years; and
- State budget documents will be required to disclose the long-term financial implications of budget decisions and the inter-period borrowing to fund operating expenses.
The Institute is partnering with the Illinois chapter of Americans for Prosperity, who will promote this and other pieces of legislation that will bring greater transparency and accountability to the state’s budget process. “Only with a true picture of our total expenditures and revenues can we begin to discuss solutions to our financial woes, said Joe Calomino, AFP of Illinois State Director. “Illinois needs budgetary reforms now and FACT based budgeting is the first step. ”
David M. Walker, former U.S. Comptroller General Speaks at Union League
Club/Truth in Accounting Sponsored Event:
On February 8, the Institute co-sponsored the Union League Business Book Roundtable hosting David M. Walker, former U. S. Comptroller General discussing his new book “Comeback America.”
“We are proud to include the Institute for Truth in Acounting to our group of ongoing program partners,” stated Denny Cummings, chairman of the Union League Club Author Group. He commented that Sheila Weinberg’s introduction of David Walker was “superb”.
As head of the Government Accountability Office (GAO), Walker warned Congress and the Bush administration as the federal surplus became a giant deficit. He now works full time to raise public awareness about mounting debt burdens.
“The collective responsibility of society is to ensure each generation has a better life – that’s called “‘stewardship’,” said Walker. “Today’s fiscal problems are not the tip of the iceberg we can see, but really the ice which is below the water.”
“Comeback America” discusses Walker’s specific solutions, including reinstating statutory budget controls as was done between 1990 and 2002, making Social Security more solvent and reforming Medicare and Medicaid.
“We cannot wait for a crisis to put our federal house in order,” said Walker.
Institute Launches State Budget Watch Website
The Institute for Truth in Accounting recently launched a State Budget Watch website, to follow budget news and legislative developments on the state level. This website continues the work of the Institute’s 2009 research publication, “The Truth About Balanced Budgets – A Fifty State Study,” and allows visitors to follow budget, tax and spending news on the state level, and share these developments with groups, friends and other networking sites. Visitors can also leave their own comments on each state homepage.www.StateBudgetWatch.org.
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