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State not alone in using creative budget tricks

MONEY: Accounting gimmicks range from denial to cash raids

BY CURT WOODWARD | The Associated Press • Published July 31, 2009

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Here's one creative way that state lawmakers helped balance Washington's troubled budget: They assumed public employees will stay on the job longer – and die sooner than expected once they finally retire.

That bit of fancy footwork, which saved the state about $45 million, is just one entry on a long list of financial gimmicks that legislators nationwide have cooked up to patch holes in their states’ budgets.

It’s a roster of shell games that might land the average taxpayer on a collection agency’s speed-dial . But when times are tough, public officials aren’t shy about juggling the books to make a short-term budget problem disappear.

“It’s often a pretty impressive set of magic tricks,” said Richard Briffault, a Columbia University law professor who specializes in state and local governments.

There are other prime examples: • California’s just-approved budget accelerates income tax withholding by 10 percent to inflate revenues during the fiscal year. The state also will save about $1.2 billion by cutting state worker paychecks one day later than usual, shifting the payroll costs into the following fiscal year. • Alabama balanced its education budget by simply erasing the cost of classroom supplies for schools. That meant the education blueprint was technically balanced, but city and county school officials were left to pick up the tab for supplies .

• With Wyoming facing about $165 million in investment losses, Treasurer Joe Meyer changed the state’s accounting rules, whisking the red ink into a multibillion-dollar permanent savings account to make the state’s earnings look larger. • In Illinois, legislators are leaving a record $3.2 billion of the state’s bills unpaid for the current fiscal year, making vendors wait longer for their money. Minnesota likewise has stalled $1.8 billion in aid payments to schools, and Colorado lawmakers are delaying $88 million intended for Medicaid and children’s health insurance providers. • Illinois also gave Gov. Pat Quinn authority to cut up to $2.1 billion however he sees fit, booking a boatload of savings without really knowing how it’ll happen. The same happened in Rhode Island, where lawmakers told Gov. Don Carcieri to cut about $63 million in operating expenses without explaining how.