The GASB is changing how municipalities will have report pension debt and liaibilites, as PublicCEO reported recently. But our report didn’t quantify the changes, simply reported on what they would be.

Orange County Supervisor John Moorlach published an opinion article over the weekend that applied the new standards to various cities in Orange County, and what he discovered is that Orange County and its cities are in deep trouble. His calculations reveal that the county is negative just shy of $3.8 billion.

From the Orange County Register:

The accounting profession has two rule-making bodies that provide generally accepted accounting principles and auditing standards for reporting financial statements. The Financial Accounting Standards Board (FASB) provides rules and promulgations for the private sector. Municipalities follow the rules established by the Government Accounting Standards Board (GASB).

FASB has required companies for 25 years to report unfunded liabilities for defined-benefit pension plans on balance sheets. GASB has not. However, GASB is finally addressing this oversight. Regrettably, it’s too late. The abuse of public employee defined-benefit plans has already been done, and the damage may be irreparable.

Read the full opinion article here.