Today’s BB: The Big 4 Strike Back

Add all four of the nation’s largest accounting firms to the growing chorus of critics urging Texas officials to step back from their threat to flout the Governmental Accounting Standards Board’s Statement 45 on “Other Post-Employment Benefits.”

In a letter to state legislators, representatives from Deloitte & Touche, KPMG, PriceWaterhouseCoopers, and Ernst & Young warn that failing to follow the new guidelines on calculating and reporting retiree health care liabilities could lead to “qualified” audits, which would, in turn, interfere with the state’s ability to borrow in the municipal bond market.

Texas officials, led by first-year Controller Susan Coombs, have argued that because retiree health care assistance is not guaranteed by law or contract, the legislature can revoke or reduce it at any time, so a calculation of future liabilities is meaningless -- and could be harmful, as the large numbers involved could spark a premature reduction in benefits.

But Statement 45 proponents respond that public employees are powerful enough as an interest group to guarantee that the legislature would never exercise that “out.”