After New York City’s close call with bankruptcy in 1975. the state required the city to balance its budget in accordance with generally accepted accounting principles rather than continuing to use “creative-accounting practices.” According to Richard Ravitch, writing in the Wall Street Journal last week, the city has not had a fiscal crisis since.

The city’s new mayor,Bill de Blasio, released his first budget last week, beginning the slippery slide back into questionable accounting: Many are questioning whether the deferral of payments contractually due city employees was properly accounted for.

Ravitch’s article describesexactly what most California cities are doing: usingdeceptive cash-basisaccounting to hide real costs and… Read More