In a state where the issue of transparency in government spending is a constant source of debate, Illinois House Bill 3181 stood out as a beacon of hope for transparency and accountability at the local level. The bill aimed to enforce a comprehensive disclosure of indebtedness in financial reports and audits of governmental units, counties, and municipalities across the state.
Unfortunately, HB3181 met an untimely end in committee, raising questions about the motives behind its demise and resistance from certain quarters.
Truth in Accounting helped with the language in this bill, and it has been filed for multiple years by Representative Tom Weber (R) of District 54, with no movement out of committee. What HB3181 does is propose amendments to existing statutes, including the Governmental Account Audit Act, the Counties Code, and the Illinois Municipal Code. If passed, it would have required every financial report and audit report submitted to the Illinois Comptroller to include a detailed account of all forms of indebtedness, such as bonded indebtedness, loans, or any other obligations, for each respective governmental unit.
This is important because we all live and are trying to thrive at the local level. What happens locally has a greater impact on your life than anywhere else. And the facts are, when your local government makes more promises than revenue coming in, things can get really bad for everyone.
In fact, Charles Marohn with the nonprofit organization Strong Towns echoes our sentiments about the accounting problem on the local level in his article about the financial distress of Houston, “The core of the problem is the way cities prepare their budgets, which is something we’ve talked about a lot. Cities use cash accounting, which is different from accrual accounting. To oversimplify, cash accounting ignores promises and long-term liabilities that cities make, focusing only on the amount of cash coming in and going out. When the mayor of Houston says his city is “broke,” he doesn’t mean that they have lots of future promises and lack the capacity to meet them. That has long been the case, but that’s not what he’s saying. He’s saying they are running out of cash.” Marohn goes on to say, “Cities use cash accounting. They have literally hit the infrastructure iceberg and don’t know it because they have not accounted for any of it.”
HB3181 would solve this cash-basis accounting issue by ensuring that long-term indebtedness is recognized locally. Will taxpayers be happy when they see the actual numbers? No, but the first step in finding a solution is recognizing the problem. This is a good time to echo Strong Town’s words: “Good decisions start with transparent accounting.”
So why hasn’t an important bill like HB3181 made it out of committee despite several attempts by Rep. Tom Weber?
One central figure in the demise of HB3181 is Representative Walker, who oversees the committee responsible for this bill, the State Government Administration Committee. While Rep. Walker has not publicly stated his reasons for opposing the bill, speculation abounds regarding potential underlying motives.
One plausible explanation for Rep. Walker's resistance could be the reluctance to expose certain local government entities to public scrutiny regarding their indebtedness. Some critics argue that certain officials may have vested interests in keeping financial information opaque. However, without a public statement from Rep. Walker, these are just speculations, adding to the mystery surrounding the bill's demise.
Or it could be that Representative Walker truly does not understand the issue of government accounting and how it differs from the corporate world in which he has worked for most of his life. According to our sources, even the Illinois Comptroller supported the bill with only minor amendments. We’ve contacted the Comptroller’s office for verification.
The demise of HB3181 is a setback that underscores the enduring challenges of promoting transparency and accountability in local government finances. Truth in Accounting will continue our efforts to see that this bill and others like it are passed across the country so our local communities can thrive under the sunshine of financial transparency.