When the recession snowball rolled downhill in California, it stopped at the city level. Because California laws require the state to reallocate portions of local property taxes in order to balance the budget, cities were faced with a choice: cut community services, raise taxes, or downsize. Corona chose to downsize and outsource.
If you don’t know whether your local city, county or state governments spend more than they take in, or whether they are able to pay the costs to maintain their assets, you’re not alone. Most people can’t figure out how to read governmental financial statements. The Government Accounting Standards Board (GASB) has been pushing for reform and has issued GASB Statement 34s.
The Government Accounting Standards Board (GASB) is responsible for establishing accounting principles for governmental agencies. The GASB Statement 34 redefines the basic financial reporting framework that governmental agencies currently use, requiring them to conform to accrual accounting. It also requires infrastructure asset valuations to be included in the financial statements of the reporting agency.
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