The New Math

October 2006 • Volume 4 • Issue 3

The accountants have spoken, and school districts across the nation are scrambling to obey.

A rule passed by the Governmental Accounting Standards Board (GASB) encourages public entities – including school districts – to estimate the total cost of retiree benefits (amortized over a 30-year period) and then publicly disclose the price of that package.

The change is applauded by some as bringing new transparency for taxpayers and a sobering understanding for policymakers of the true outlay for retiree perks such as health care, dental, vision and prescription benefits, in addition to the actual pensions.

For others, it is yet another way to make school district budgets appear inflated, and forces districts to run a strange maze, hiring actuaries every two or three years to do lifeand-death calculations and assigning a number to the unknowable.