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| Good News, Bad News - Which Do You Want First? |
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| Written by Pete Theisen |
| Tuesday, 11 January 2011 03:59 |
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Bad news: The City of Sarasota is between $121 million and $180 million in the red on employee medical benefit funding. Good news, the City is catching up at the rate of about $5 million a year, and should be even in about 24 to 36 years, more or less. What? Why? The Governmental Accounting Standards Board (GASB) has recently imposed new accounting standards upon the city that amount to an unfunded mandate. It appears that the GASB has great power in several directions but seems to see responsibility only to disrupt in a slightly different way every year, another story for another time. These new accounting standards have resulted in an on paper funding deficit of between $120 and $180 million that we either have to take as a charge, destroying our credit rating, or fund with a combination of service cuts and fund raising. The city's behavior in the past was perhaps unwise, but acceptable under the old accounting rules. Nothing done ever amounted to wrongdoing, but we still are confronted with a huge problem that has to be solved if not immediately then soon. Nearly every city of any size in the country has the same issue. What to do? The city has cut the budget for several years running, suffered through three big layoffs and in the last few days imposed fees on retiree health benefits. This has merely scratched the surface My first choice of a remedy is for the Federal Government to send a bailout in our direction. This, after all, is a mere fraction of the billions sent to private entities in the finance and banking "industries". The city finance office sees this as so impossible ("there are no bail out funds for this purpose") that they haven't even bothered to ask. I think we are "too big to fail" and we should ask, "impossible" or not. |
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