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ysabetwordsmithThe Great GASB!
There are major flaws in the accounting standards that shape municipal finance in American cities. But there’s an opportunity too: a chance to comment on — and perhaps change — those standards going forward.
Using standards that only look at roads as “assets” and not as “liabilities" hides their true cost. We cannot sell this road asset to the next town over (consider this 2014 Strong Towns post). The standards merely ask for documentation of the infrastructure, but don’t account for the obligated burden of future replacement. We are watching the consequences of that decision unfold in plain sight. Let me be clear: these are standards not laws. Yet our municipalities are marching themselves off the fiscal cliff because the standards made them do it.
If you can't track both liquid and nonliquid assets, liabilities, and income then your budget will never work and you will go broke. You must know how much you have and how you are spending it in order to stay balanced. This is not how municipal budgets typically work, and that is why most towns are broke. But ecovillages and other intentional communities typically do factor in all of those things, because they're running on a strictly local budget from residents; they rarely if ever get government money for infrastructure.
Don’t let this get you down. We have a big opportunity. The great GASB gods are opening the standards for evaluation and public comment this year. This is a link to their drafts and calendar of deadlines. The non-profit Truth In Accounting has published more details here. We pulled together a study group for anyone interested in knowing more details, with the goal of creating some comment talking points.
Strong Towns provides a lot of excellent tools for pursuing improvement. Badger your town council for clear accounting. Use your local library to extract as much information as you can about your town's liabilities (especially the ones not in the formal budget) vs. its tax base. These will likely yield horrifying results that you can then use to push for more honest accounting in infrastructure.
There are major flaws in the accounting standards that shape municipal finance in American cities. But there’s an opportunity too: a chance to comment on — and perhaps change — those standards going forward.
Using standards that only look at roads as “assets” and not as “liabilities" hides their true cost. We cannot sell this road asset to the next town over (consider this 2014 Strong Towns post). The standards merely ask for documentation of the infrastructure, but don’t account for the obligated burden of future replacement. We are watching the consequences of that decision unfold in plain sight. Let me be clear: these are standards not laws. Yet our municipalities are marching themselves off the fiscal cliff because the standards made them do it.
If you can't track both liquid and nonliquid assets, liabilities, and income then your budget will never work and you will go broke. You must know how much you have and how you are spending it in order to stay balanced. This is not how municipal budgets typically work, and that is why most towns are broke. But ecovillages and other intentional communities typically do factor in all of those things, because they're running on a strictly local budget from residents; they rarely if ever get government money for infrastructure.
Don’t let this get you down. We have a big opportunity. The great GASB gods are opening the standards for evaluation and public comment this year. This is a link to their drafts and calendar of deadlines. The non-profit Truth In Accounting has published more details here. We pulled together a study group for anyone interested in knowing more details, with the goal of creating some comment talking points.
Strong Towns provides a lot of excellent tools for pursuing improvement. Badger your town council for clear accounting. Use your local library to extract as much information as you can about your town's liabilities (especially the ones not in the formal budget) vs. its tax base. These will likely yield horrifying results that you can then use to push for more honest accounting in infrastructure.
(no subject)
Date: 2026-05-18 01:20 pm (UTC)Two thoughts: 1. Cities, and also states, have massive unfunded pension liabilities. 2. When I lived a condo, they did an assessment going forward, of how much would likely be needed to replace different "infrastructure" as well as routine maintenance. For example (making up these numbers, don't recall the real ones), the roof was replaced 5 years ago for $100,000, and is expected to last 20 years. Allow inflation of 4%/year, then we'll need $180,000 15 year from now, which means start setting aside an extra $12,000/year. Repeat for all systems and structures. Worked really well.