Forcing Governments To Act More Like Businesses
June 7, 1999
The Government Accounting Standards Board is coming up with new rules which would provide municipal taxpayers with a much clearer idea of what their money is buying -- and has bought in past years.
The accounting procedures will require government officials to change the way they look at almost all financial decisions. It will also make many costs that are now hidden and shifted to future administrations far more apparent, supporters contend.
- Governments will for the first time have to calculate the value of nearly every major asset they own -- from roads to bridges to prisons to hospitals -- even if those assets were acquired or built decades ago.
- The largest governments would start using the rules for fiscal years beginning after June 15, 2001 -- while smaller governments would have one or two more years to comply.
- Governments with less than $10 million in annual revenues -- which account for about two-thirds of the nation's total state and local governments -- would not be required to go back and put a value on their existing infrastructure.
- But those smaller entities would be bound by the same rules as everyone else in future years.
All governments would be exempt from having to establish values for assets that were acquired more than 25 years ago -- unless significant renovations have taken place. For example, New York City would not have to evaluate the 116-year-old Brooklyn Bridge -- were it not for the fact than it was renovated in 1983.
The GASB set the standards for how the nation's 84,000 state and local governments keep their books.
Source: Melody Peterson, "Putting A Price on the Brooklyn Bridge," New York Times, June 6, 1999.
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