Governments Hiding Indebtedness Gets Harder
by Gail Riecken, CCO Statehouse Editor
The State Board of Accounts has been doing its job. About four years back the SBOA successfully advocated legislation to ensure responsible accounting procedures for governments whose books they review. It was a good start, but surely, did not go far enough.
SB 608 is the SBOA bill this session and it is the kind of legislation I like to see. SB 608 Â is in response to public concern over the increasing indebtedness of local government. Among the requirements of the bill, a new comprehensive report is going to be required for the public.
Here is the summary from the Fiscal Report on the bill.
Debt Capacity Analysis Report:
The bill provides that, before a political subdivision that is subject to audit by the SBOA may issue or guarantee any debt obligation, the fiscal officer of the political subdivision must first prepare a debt capacity analysis report (report) and present the report to the fiscal body of the political subdivision in a public hearing.
It requires the SBOA, with the assistance of the Department of Local Government Finance (DLGF), to prescribe a standard form report that must be used by a fiscal officer in the presentation. The bill requires the report to include a determination of the percentage of the political subdivision’s total debt obligations (including guarantees) compared to the political subdivision’s prospective revenue available for debt service.
The SBOA continues to show just how important they are by getting this legislation on the floor of the Senate (could be heard as early as this next week ). It will take grassroots support to get this bill adopted and then sent on to the House where it can receive another battle. This is year city councils are on the chopping block, so ask them where they stand. Ask them to call their Senator.
