[1]
Oregon Transformation
Oregon has a constitutional requirement to have a balanced budget, which means we can only spend as much as we take in.
But the truth is Oregon does not have a balanced budget, at least not according to the Institute for Truth in Accounting [2], whose mission is to bring transparency to government financial reporting.
Deficient accounting rules and questionable budgeting have led to unpaid bills of $20 billion in Oregon.
That’s a $17,120 bill for every taxpayer in Oregon.
What’s more worrisome is that even if the State of Oregon liquidated every last asset at its disposal, we would still be in the hole by $3 billion.
How did we get into this mess? One reason is that state officials use antiquated budget and accounting rules to calculate the cost of government employees.
Since retirement benefits are not due immediately in cash, government accounting rules have allowed the true cost of government employees to be hidden in the notes of financial statements.
Instead of paying for the total cost of government employees, including retirement benefits in the period they are earned, government accountants, politicians and subsequently budgets have largely ignored the expense.
The private sector reformed their accounting rules over two decades ago in order to give shareholders a true accounting of the cost of their employees.
Why does Oregon government continue to use misleading numbers? Why are they hiding our growing debt?
Sources: Institute for Truth in Accounting: A Fifty State study [3]