Materiality - The concept that recognizes that small or insignificant deviations from generally accepted accounting principals can be treated in the easiest manner.
Or as it relates to Kentucky state government - close enough for government work.
From the Herald-Leader:
“According to Bill Hanes, executive director of the Kentucky Retirement Systems, the current budget falls $365 million short of an adequate investment in state workers' pension plans.
Some $6 billion to $7 billion of the Kentucky Employees Retirement System's $11 billion in unfunded liability can be attributed to health insurance, according to Hanes.
A recent actuarial study concluded that if current trends continue, the KERS health insurance trust fund will be in default in 2013, and the pension trust fund will be in default as early as 2021. At that point, the pension and health benefits would be put on a pay-as-you-go basis at an annual cost of about $2 billion to taxpayers.
At KTRS, health insurance benefits for retired teachers are already on a pay-as-you-go basis and account for $4.2 billion of the system's nearly $9.7 billion in unfunded liability.
Health insurance is also the driving factor in the $6.8 billion unfunded liability of the County Employees Retirement System, which serves and is funded by local governments and their employees.”
The $365 million Hanes is talking about is sort of the minimum payment on the credit card. From an accounting stand point it doesn't even reach the level of materiality.
And the projected surplus Ernie Fletcher is talking about is a smoke and mirrors kind of answer.
Why should taxpayers care?
Because folks, that annual 2 billion dollars is going to come directly out of your pockets if this mess isn’t fixed. Let’s see Ernie tax tinkerize that.