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RIPR is a (paper) newsletter
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- Feb 08 (30) - IRS migration data,
and what it says about RI, a close look at "entitlements", historic
credit taxonomy, an investment banking sub-primer.
- Dec 07 (29) - A look at the state's
underinsured, economic geography with IRS data.
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of Against Prediction, about the perils of using statistics
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IDs for voting, review of Al Gore's Against Reason
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Security Trustees' Report
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What some Depression-era economists had to say on investment, and why
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Book review of Blocking the Courthouse Door on tort "reform."
- Dec 06 (22) - State deficit: What's
so responsible about this? DOT bonding madness, Quonset, again,
Massachusetts budget comparison.
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Iraq by Geo. McGovern and William Polk, New rules about supervisors
undercut unions, New Hampshire comparisons, and November referenda guide.
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quality, anti-planning referenda and the conspiracy to promote them,
affordable housing in the suburbs, union elections v. card checks.
- Jun 06 (19) - Education report, Do
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credit: who uses it.
- May 06 (18) - Distribution
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how to reform health care, and how not to.
- Mar 06 (17) - Critique of commonly
used statistics: RI/MA rich people disparity, median income, etc.
Our economic dependence on high health care spending. Review of
Crashing the Gate
- Feb 06 (16) - Unnecessary
accounting changes mean disaster ahead for state and towns, reforming
property tax assessment, random state budget notes.
- Jan 06 (15) - Educational equity,
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interview with Thom Deller, Providence's chief planner.
- Nov 05 (14) - The distribution of
affordable houses and people who need them, a look at RI's affordable
housing laws.
- Sep 05 (13) - A solution to pension
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- Jul 05 (12) - Kelo v. New London:
Eminent Domain, and what's between the lines in New London.
- Jun 05 (11) - Teacher salaries,
Veterinarian salaries and the
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- Apr 05 (10) - Choosing a crisis: Tax fairness and school
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tax incentives.
- Feb 05 (9) - State and teacher
pension costs kept artificially high. Miscellaneous tax suggestions for balancing the state budget.
- Dec 04 (8) - Welfare applications and the iconography of welfare
department logos. The reality of the Social Security trust fund.
- Oct 04 (7) - RIPTA and DOT, who's really in crisis?
- Aug 04 (6) - MTBE and well pollution, Mathematical problems with property taxes
- May 04 (5) - A look at food-safety issues: mad cows, genetic engineering, disappearing farmland.
- Mar 04 (4) - FY05 RI State Budget Critique.
- Feb 04 (3) - A close look at the Blue Cross of RI annual statement.
- Oct 03 (2) - Taxing matters, a historical overview of tax burdens in Rhode Island
- Oct 03 Appendix - Methodology notes and sources for October issue
- Apr 03 (1) - FY04 RI State Budget critique
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Responsibility:
 Tom Sgouros
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Mon, 19 Dec 2005
Health care accounting
An interesting (and alarming) article in Sunday's Journal (front page,
above the fold) was about the exploding costs of health care for state
government retirees. Since the deal was made under the DiPrete
administration, costs have exploded. This part is a familiar story.
But there's worse in store:
As a result of a new public-sector accounting rule, Rhode Island --
along with every other state, city, and town, water, sewer and school
district in the nation -- will soon have to disclose to its taxpayers
and bondholders the total value of its retiree health-care promises.
The way it should read is:
...will soon have to disclose to its taxpayers
and bondholders the total value of its retiree health-care promises with
accounting rules designed for the private sector.
The exploding cost of health care is a huge problem for everyone, not
only retired government employees. To single them out like this is kind
of strange. Air pollution is a real problem for retired government
employees, too. (And it probably pushes up the cost of their health
insurance, besides.) But that's not how I'd usually think of the
problem.
But worse, the article conflates that problem with an accounting change
ordered by GASB (Government Accounting Standards Board). The important
difference between a private business and a government is that a private
business can go bankrupt and disappear. In that case, it's important
that there be financial backing to the commitments it has made to its
customers and employees. This is why it's inappropriate for a private
business to pay for pension costs out of current revenues, and why a
corporation's "unfunded liability" -- the difference between what they
owe and the cash they have on hand -- is such a big deal.
The same is not true of a government. Social Security, for example, has
happily paid benefits out of current revenues for decades, and there's
no reason it can't continue into the foreseeable future. But this
accounting rule change will make this kind of perfectly responsible
fiscal management appear to be mismanagement, and will cause thousands
of governments across the country to raise taxes or cut services in
order to pack away huge sums of money so they can appear more "fiscally
responsible" than they really need to be. A hardship for all of us and
a windfall for people whose business is to invest those funds, but I'm
sure that had nothing to do with the changes.
09:39 - 19 Dec 2005 [/y5/de]
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