Known as the Government Accounting Standards Board (GASB), this seven member board establishes accounting standards for some 80,000 state and local governments with over 12 million employees, including what information should be included in their financial reports. While they are not law, state and local officials adhere to GASB standards,.

"We've been monitoring developments since last year when GASB (pronounced "gasby") first proposed standards that officials report the long-term costs of retiree healthcare benefits, and not only the costs in a particular year," according to Legislative Chairman Bill Hill. "If officials complied with this proposal, they would undoubtedly have to report a far greater cost for these benefits."

Opponents have argued that the GASB standards ignore the fact that benefits and coverages are flexible and, therefore, will exagerate the costs. Unfortunately, these arguments carried no weight with GASB.

Recently, the board finalized the standards, which are entitled Other Post Employment Benefits or OPEB. They will be implemented in a staggered fashion, beginning December 2005 with governments having more than $100 million in gross revenues and eventually with all of them in December 2007.

It's important to recognize that the OPEB standards extend beyond the reporting of these costs. Officials are also expected to show how they intend to pay off this liability.

When private employers were asked, over 10 years ago (1993), to comply with similar standards, the results were very damaging for employees. Since 1993, over 55% of the employers, that had been providing some health insurances to their retirees at that time, stopped doing so.

"Frankly, any drain on state or local government revenues to pre-fund future health insurance costs would be disastrous to our pension agenda," opined Association President Ralph White. "GASB is God's word to city and town accountants who are very sensitive to their bond rating. And that's what this is all about - bond rating.

"It's the same principle that led to our current pension funding schedules. In the case of pensions, it (funding) was necessary, but this state is in no condition to embark on future health cost funding without increasing taxes."