Houston City Controller Annise Parker opposes legislation that would allow municipalities in Texas to avoid reporting publicly the cost of health benefits promised to city retirees.

The Governmental Accounting Standards Board is requiring state and local governments to report in their annual financial statements how much they owe in other post-employment benefits, the health care coverage promised to their retired employees.

“We are already required to report the cost of pension benefits, why shouldn't we also be telling the public what it will cost to provide health care to our retirees,” said Controller Parker. “These are potentially huge financial liabilities and while we may not have an obligation to honor these commitments in the future, we have a responsibility to acknowledge them. Any assertion to the contrary is an attempt to bury our head in the sand.”

Controller Parker said she hopes there will be no attempt to use this new accounting requirement as reason to discontinue providing these benefits to our retirees. “Dropping retiree coverage is always an option, but such action would force our retirees into the public health arena, thus shifting the responsibility from one governmental entity to another and increasing the burden on an already overloaded system. The key is having a long-term financial plan in place,” she said.

According to a preliminary actuarial study, Houston 's current long-term financial liability for retiree medical coverage is estimated to be $3.2 billion. This is in addition to an unfunded pension liability in excess of $2.2 billion dollars.

The new accounting rule requires only that governments disclose the total long-term obligation in the footnotes of their annual financial statements, not that they have the money in the bank.

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