August 10, 2006

Picking and Choosing

The Tennessean says the voters of Nashville ought to have the right to select their vice mayor .... but not their property tax rate.

The best time for voters to express their opinions about tax increases is during mayoral and council campaigns, not by vetoing a tax hike that is needed.

But, wait. While The Tennessean thinks the average Nashville voter couldn't understand the specifics of the city budget, they apparently do think the average voter in America IS smart enough to understand the federal budget, which is more complex by several orders of magnitude than the Nashville city budget, as they revealed in an editorial recently urging that the official "Financial Report of the United States" be widely publicized so "the public" can "demand fiscal sanity from Congress and the White House."

Rep. Jim Cooper, D-Nashville, has been arguing for honesty in government accounting; now he's taking this issue directly to the people by releasing the official "Financial Report of the United States" in book form.

The financial report is not the same as the U.S. budget: It's far more accurate. The budget, which is widely distributed, is the report that serves as the basis for decisions in Congress. Yet the other report - the audited financial report of the U.S. - is released around Christmas with no fanfare. Only a few copies are printed. It has been available on the Treasury Department Web site, but the public has never been made aware of that fact. And the financial report - not the budget - uses the standard rules of accounting that the government requires businesses to use.

The difference in the two financial documents is completeness. While the budget sticks to cash accounting, using revenues and expenses, the financial report uses accrual accounting; instead of just counting expenses when the checks are cut, it counts expenses as they are incurred.

In the foreword to the book, which is due in bookstores this month, Cooper explains that he's been trying to convince government officials to use the audited financial statement so that Americans can understand the seriousness of the U.S. debt and deficit. House members now support that request; they've passed a measure asking the president to use the audited numbers in his budget. The Senate needs to pass this bill.

The U.S. government should live by the same accounting rules it requires of businesses. Knowing that the deficit and debt are far more serious than ever imagined would be painful in the short-term, but only when all the information is known can the public demand fiscal sanity from Congress and the White House.

But ... where is the Tennessean editorial urging wide distribution of Nashville's Comprehensive Annual Financial Report, so Nashville voters can 'demand fiscal sanity" from Metro Council and the Nashville mayor's office?

Okay then, back to my regularly scheduled vacation...