Despite the fact that Norwalk, Conn., is located roughly 50 miles north of the Accounting Today offices, I was fairly certain I could hear sighs of relief emanating from the Governmental Accounting Standards Board and echoing all the way down to lower Manhattan.

The standard-setter for state and municipal governments was no doubt relieved when Connecticut Governor M. Jodi Rell surprisingly vetoed a bill that would have allowed the state to set its own accounting standards, thereby leaving GASB, both figuratively and literally, in its rear-view mirror.

The measure, which had passed in both the Connecticut House and Senate, prompted a furious letter-writing campaign from Financial Accounting Foundation, president and chief executive Robert DeSantis urging Rell to veto the legislation, an effort that also elicited a letter from AICPA chief Barry Melancon, who more or less echoed DeSantis’ concerns.

Connecticut Comptroller Nancy Wyman, however, said the measure would have allowed the state to balance its budget, something it had been unable to do under generally accepted accounting principles, while amassing a deficit of about $1 billion. Adoption of GASB's standards would entail the state paying down that figure at a clip of $150 million a year over a 14-year period.

She also said that she would not use the bill’s passage as an entrée to set accounting standards for the state.

Rell however was skeptical, claiming that the “language of the bill would allow the comptroller to issue financial statements in whatever standards she prescribed,”  though Wyman announced intentions not to do so.

And moreover, had Rell signed the bill, there was nothing to prevent a future comptroller from exercising that standard-setting privilege.

Connecticut's move to bypass GASB comes just weeks after a movement in Texas attempted to opt out of a new rule that requires governments to disclose how much they will have to pay for retired workers' health care.

I doubt anybody who deals intimately with municipal accounting matters is naïve enough to think that Rell’s veto alone will discourage other state-vs.-GAAP battles from emerging. Over the ensuing months, I think you’ll see a number of skirmishes in other jurisdictions.

The battle in Connecticut may be over, but remember, fights are fought in rounds and this battle promises to go the distance.

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