Jones: Pension Math Could Have Major Impact
Pension accounting change could hurt schools, cities
A scheduled accounting change in the way governmental entities must treat pension debt has local city and school financial officers sweating potential higher borrowing costs.
Beginning in Fiscal Year 2015, the Governmental Accounting Standards Board is set to require many Oklahoma schools and cities to list millions of dollars of pension debt on their financial statements even though they “don’t owe it” and “can’t legally pay it,” said state Auditor Gary Jones.
“It could be devastating for the schools. It could be devastating for the cities,” Jones said.
That should concern taxpayers, since the change could potentially prompt credit rating agencies to downgrade the credit ratings of Oklahoma cities and schools. That, in turn, could lead to higher interest rates on bond issues that taxpayers would have to finance, he said.