Prairie State Wire

Sheila Weinberg, founder and CEO of Truth in Accounting, said on the Prairie State Wire Podcast that federal budget surplus narratives have misled the public by masking rising national debt and long-term fiscal obligations.

"I started actually on the federal side when I realized that the federal government was just not producing financial data that allowed citizens to be knowledgeable participants in their governments," said Weinberg. "It started over the infamous surpluses and we had those as far as the eye could see. But they were going into debt at the same time."

Recent debates in Washington highlight whether reporting a federal budget "surplus" is misleading if overall national debt still rises due to interest costs and off-budget liabilities. According to Bruegel, some lawmakers argue that focusing only on the surplus or deficit obscures long-term solvency issues, while others emphasize the political value of showing a balanced budget. This dispute has intensified around new fiscal proposals like the "One Big Beautiful Bill Act," with critics warning that official narratives understate structural deficits.

The Congressional Budget Office (CBO) projects the federal deficit in fiscal year 2025 will reach about $1.9 trillion, while debt held by the public is expected to climb toward 156 percent of GDP by 2055. These projections illustrate the persistent mismatch between federal revenues and spending, even outside of recessionary periods. As reported by the CBO and summarized by the Committee for a Responsible Federal Budget, such debt levels would be the highest in U.S. history.

In the late 1990s, the U.S. experienced rare federal surpluses, peaking at $236.2 billion in 2000 and followed by $128 billion in 2001. According to historical budget data reported by the Clinton administration and cited by Wikipedia, those surpluses briefly slowed growth in the national debt as a share of GDP. However, by the early 2000s, deficits reemerged, and the debt-to-GDP ratio began climbing again, reversing the fiscal gains of the surplus era.

Weinberg is also noted for founding Truth in Accounting in 2002 to promote transparency in government finances. According to her biography on Truth in Accounting's website, she is a certified public accountant who began her career in public accounting and consulting and has worked with organizations like the Concord Coalition on fiscal responsibility issues. She earned her Bachelor of Accounting degree from the University of Denver and became a CPA in 1981.

Truth in Accounting is based in Illinois and operates as a nonpartisan nonprofit dedicated to providing transparent financial information about federal, state, and local governments. According to its official website, its mission is to educate citizens about fiscal realities through reports such as the Financial State of the States and Financial State of the Union. The group evaluates budgets and balance sheets to highlight unfunded liabilities and promote accountability.

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FULL, UNEDITED TRANSCRIPT

Bryan Hyde: [00:00:00] Welcome to the Prairie State Wire Podcast. I'm Brian Hyde. Today I'm joined by Sheila a Weinberg. She's a certified public accountant and also the founder of and CEO of Truth in Accounting. And Sheila. Wonderful to, to make your acquaintance here, tell us a little bit about yourself and about your background, and then let's, let's talk about transparency and, and, and accountability in, in government finance.

Shiela Weinberg: I started actually on the federal side when I, when I realized that the federal government was just not producing financial data that allowed citizens to be knowledgeable participants in their governments. It started over the, if you remember the, you know, the infamous surpluses, and we had those as far as the eye could see.

But they were going into debt at the same time. And Brian, even though I know you're not an accountant, I think you could understand that you cannot have a surplus and go into debt at the same time. Yet the federal government was stating that, and I found out that there really wasn't a surplus at that point in time.[00:01:00] 

And in fact, if you handled social security alone as like a corporation has to handle their pensions, then this, that program alone was running a $500 billion deficit. Hmm. And then the 2000 presidential election rolled all along. And remember Gore was gonna put the surplus in the lockbox and the Governor Bush was going to return it to the American public.

And I'm shaking my TV every night going, there isn't a surplus. We're talking about a surplus. We should be talking about how we're gonna handle the baby Burma. And after the election happened, I was like. Did we just elect the leader of the largest financial organization in the world based upon the set wrong numbers And we had, so I started Truth in Accounting and fortunately got a board in some team and, and now we do the financial state of the state's financial, state of the union, financial state of the cities, and an offshoot of our financial state of the States is our transparency score.

Bryan Hyde: So safe to say you guys have not only been doing this for a [00:02:00] while, but you have a solid track record People can look back on and say, okay, how are they doing? When it, when it comes to the states and in particular to the state of Illinois, how does Illinois rank in terms of transparency and reliability and understandability in their financial reports?

Shiela Weinberg: They rank the worst. They, they get a score. A hundred is the best score, and they only get 42 out of a hundred. I am astounded that as of the middle of July, 2025, the state has not issued their financial report for June 30, 20, 23. They are the latest financial data we have that's audited is for June 30th, 2022.

Yet the governor passed the budget. They, they've been making financial decisions when, when. When Warren Buffet does his, you know, annual stockholder meeting, the very first thing he [00:03:00] mentions is their financial report, and Illinois does not have that. So the legislator, the governors, the taxpayers don't have the information that's in there.

Bryan Hyde: Okay? So I wanna be magnanimous and believe there's gotta be a good reason why they wouldn. Be releasing their, their financial report. I'm drawing a blank, however, is there, is there any possible justification for a state not well wanting that information out? 

Shiela Weinberg: All the other states except for Vermont issue have issue.

I mean, I'm sorry, except for Nevada have issued their 2023 financial report, the standard to issue. We think it should be issued within a hundred days. The government standard is 180 days. This is like what? 600 days later. And now what we have talked to the comptroller's office, they're the responsible entity to produce this report, but they have to rely on the government's agencies to give them the numbers.

And they always point fingers and say, well, the government [00:04:00] governor hasn't given us the numbers. And or the state auditor, which again is a separate. Office, they haven't finished the audit, so we, we don't, we don't have the, we don't have it out has she? Even though all the other states except for Nevada have theirs out.

Bryan Hyde: Sheila, as you mentioned before, I'm not a CPA, but, but I have to wonder, is there some kind of CPA magic. By which, you know, certain state officials, maybe those who crunch the numbers for the states come up with, with the kind of numbers that are agreeable to those in charge. I guess what I'm asking is, do, do they do the officials who are supposed to measure those numbers, cook the, the reports in favor of whomever is in power?

Shiela Weinberg: The financial report, and that's why we look, use the financial report to do our, our studies and also to do the transparency score. It is audited. So there, and there is a standard procedure and the standard format. Now we have some questions about those formats, but I'm, I'm positive, Brian, you do not wanna get into a discussion of [00:05:00] deferred inflows and outflows, I guarantee you that.

So there are some weaknesses in there, but it, it's. The financial report, which all the states use the same standards is pretty good. Now, the budget on, on the other hand, which evident, you know, they were able to produce a 600 page budget and pass a 600 page budget. I just call that political math, and that is created, they just, they in essence, just.

They did just put in there whatever they want to, and, and what we have found is that, you know, the state does have a balanced budget requirement, and the reason they have a balanced budget requirement is so that they don't get into unsustainable debt, which Illinois is in. But the most important reason is so we can hold them.

Elected officials accountable. So if you're going to offer benefits and services, you should make the taxpayers pay for those. If you can just offer unlimited services without a corresponding tax raise, well of course [00:06:00] you're gonna get reelected, but you need to have this balance of where you're making the taxpayer pay for it.

So if like they provide too many goods and services and the taxpayers don't wanna pay that much in taxes, then you might not get reelected. But in Illinois. Here are the tricks that, the major tricks they do, they will record loan proceeds as revenue. So if you go to the bank and you borrow money, Brian, you would say, oh, I, I just got, you know, X amount of money, income.

It's like, no. In fact, during COVID, the state borrowed $3.2 billion from the Federal Reserve, and the governor has repeatedly said, I have balanced every single budget. He recorded that, in essence as revenue. The lar they, they, the balance budget requirement only says. Expenditures. So they will, if they don't wanna write a check for it, they just don't include that amount in the budget.

And then the largest thing, which again the governor has, is saying, I'm balancing the budget. I [00:07:00] fully fund the pensions. And they don't fully fund the pensions. He's shorting the pensions by $5 billion at, at last year. And, and again, he's saying that the budget is balanced and now. What he's fully funding is some convoluted funding schedule that the legislature came up with years ago.

This schedule is, so what they did is they back loaded. It said, oh well. We're gonna fund a little bit now, but we'll ramp it up. We'll ramp it up and pay more after we're out of office in 50 years. This schedule is so unreliable and so unrealistic that an SEC official said it was a balloon payment on steroids.

And I mention an SEC official because the SEC in 2013 charged the state with securities fraud. Wow. They're saying in their bond offering that this plan is going to fully fund the pensions. Over 50 [00:08:00] years, they did clean up their bond offering. In the bond offering. They say, well, here's how much we're, we're, we're, we're contributing.

We plan to contribute. Here's what the actuaries say we should do. But they don't do that in the budget document. And also you would think that if the SEC said that. This is an unrealistic schedule. You would change the schedule. They never changed the schedule. All they changed was the bond offering. And then in the 600 page budget, the governor says that he's balancing the budget and fully funding the pension.

I truly believe that the SEC needs to come back and say, you know, governor, you're really not giving investors, taxpayers. Truthful information and he needs to, they need to investigate that. 

Bryan Hyde: Now, I, I love how you call it political math and I think it's a very diplomatic and accurate way of, of describing it.

But I wanna circle back for a second to something you mentioned just to [00:09:00] I, 'cause I want to hammer this home. If people take away nothing more from our conversation at this point, it's that you mentioned if there isn't transparency with how government uses our tax dollars. Then there could be no accountability.

If we don't know what they're doing, how can we hold them accountable? 

Shiela Weinberg: Yes. And, and, and if they can go ahead and spend and use these budget tricks to pretend the budget is balanced. And also think about like when people go to vote. Okay. Governor Pritzker, when he had his last campaign, again, I was shaking my TV every ad.

It was like, I've balanced the budget every single year. The taxpayers, the voters of Illinois assume that he balanced his budget, but they use these accounting tricks to, to truly not balance their budget. And then the taxpayers go to the voting booth and it's like, well, he's balanced our budget. He must be being fiscally responsible.

I will reelect him. So they're not getting the information they need [00:10:00] to make decisions on tax, some spending policies, and they're not getting the information they need on who to vote. Think about if the governor had to increase the, the, the taxes by $5 billion to cover this pension contribution, or by $3 billion to cover, you know, the loan from the the, from the Federal Reserve.

Well, then they would've had to raise taxes and then maybe some voters might not vote for him. But again, they use this political math to pretend it's ba balanced and, and it's not. So it's citizens just don't have the information to hold them accountable. Not there. 

Bryan Hyde: Well, it seems like there's quite a difference too, between what you do in, in truth in accounting versus the, the, the typical political fray.

You are crunching numbers in, in the interest of accountability. In other words, what is government budgeting? What is it spending, what is it actually doing with taxpayer dollars? Rather than trying to, you know, litigate in the court of [00:11:00] public opinion, you know, this political initiative or that political initiative.

This is just about the money. 

Shiela Weinberg: Just get the numbers right. We, we don't care if, we really don't even care if the budget is balanced. We just don't want you to tell them that the budget is balanced. When the budget is in balanced, we want the citizens to understand the true debt of the state. Instead of that we're running, that we are balancing the budget so that, and then we, we don't.

We don't say, well, you should raise taxes to cover the expenses, or You should cut services or benefits or raise them. We just want the numbers out there so the citizens have the information they need to vote and to be knowledgeable participants in their government. Think about if you are promoting a tax and spending policy.

You know, let's say you want a specific program that the state, well, if they're saying they balancing the budget and sometimes they even say they have a surplus, or they have, now they're saying they have a rainy day fund. [00:12:00] Well, you would say, well, I want, I think this service is good. We should, we have the money for it, let's do it.

But would you advocate for that if you understood that the state was more than $140 billion in debt? That even though they say they have a rainy day fund, they, they, they, in essence haven't paid their credit card, the minimum on their credit card balance. You, you would make different decisions. 

Bryan Hyde: So talk to me a little bit about what, what truth in accounting does in terms of, of working to, to shape the right policies to be in place to, to ensure that we're getting accurate numbers.

Shiela Weinberg: Well, we highlight, you know, the issues. So the transparency score is one part of that. Another part is we highlight, you know, when, like for example, Illinois, the last financial report they had, they got a disclaimer opinion. In other words, that would be like, you didn't even turn your homework in. We can't grade it.

The auditors couldn't even grade it 'cause they, they didn't turn the homework in. So they got a disclaimer opinion, [00:13:00] which. The private sector would be the kiss of death. You know, you would be, you would be blackballed, your loans would be called in, you would be pulled off the stock market. The IRS would be after you.

But the state of Illinois got a disclaimer opinion and nobody cared. So we, we try to promote that. We also, we were instrument, we try to get, remember I mentioned that the financial reports are done using pretty good standards. We try to make those standards better. So for example, when we first started, we.

The state and local governments were not re, they were required. They were required to keep their pension liability off their balance sheet. It would be like when you went to the bank for a loan. It was like, and you had brought in your papers. You just would, you would be required to lead your credit card statements at home, and so we fought hard for years to get this liability that the state and local governments, including Illinois, have to put this liability on their books.

Unfortunately, we won [00:14:00] that. There are some still issues with that. IE. They use year old data, which is like what it would be again, like you going to your credit to your bank for a loan and you bring in your credit card statement from last year. They bring in their pension liability numbers from last year, and then we we're still continuing to.

Change those. The other weird thing that the governments have is they keep, they keep three sets of books. You've heard of like two sets of books. Well, this is three sets of books. They keep the budget, ones that are done using political math. They keep government wide statements, which are done pretty good.

We still have some issues. And then they keep these fund statements, which again is, it's just a cash flow statement that. Kind of matches the Bud budget numbers and we're trying to get rid of those, they call it a modified accrual basis, and we're trying to get tho that type of accounting gone. So, so we continue to do that.

And then just if, if your listeners want to go to [00:15:00] our data hyen z.org website. You can go in, get the state of Illinois' information, the City of Chicago's information, all 50 states, 75 most populated cities. And then there's a great charting feature there where you could compare Illinois to other governments.

For example, if you want our thinking of moving, you might look at, you know how we have 700 data points. You look at our taxpayer burden, which represents how much. How much debt the government has your share of that. So if you're moving to another state, you don't wanna have a large share of that 'cause you're gonna be on the book for it.

So you, you can create those type of charts and get information about all the governments. 

Bryan Hyde: Okay, Sheila, we're down to, to the closing minutes here. I just, I have a couple of quick questions for you. One of them is, will we ever see the, a new financial report from the state of Illinois and, and secondly, the taxpayers, the people who are most affected, what is the best course of action they can take based on what you are sharing with [00:16:00] them?

Shiela Weinberg: Well, the best course of action they can take is to go to our website, educate themselves. You can print out our two pager financial state of Illinois. And again, when your stead legislature or governor says that the budget is balanced, so to go really is it really balanced and understand the true debt.

And then the other thing that they can do, and we just came up with this, is you can file a complaint with the SEC. To say that the governor is saying that the budget is balanced, he's saying that he is fully funding the pensions. This might apply to the anti-fraud provisions 'cause they issue bonds and it's very easy to issue a complaint to the SEC so that they could come in and, you know, reexamine Illinois.

Are they continuing to do securities fraud? In my opinion they are, but I'm not an SCC official, so, so that, so they could do that also. 

Bryan Hyde: It seems like there's, there's a lesson here too, in, [00:17:00] not everybody is a numbers person. My wife is, thank goodness I'm not, but it's important that citizens don't just blow off the numbers of what their government officials are doing with the, with the money that they're spending.

We need to know, because that represents, you know, actual hard work and labor and value coming from the taxpayers. 

Shiela Weinberg: Yeah. And what we find, what I've, I've find is that. Previously, I don't think you needed to pay attention to their gov. Your government in that numbers, you know, if they were providing you good services and benefits, you weren't paying well.

Because we weren't paying attention. The governments grew and grew and grew, and now the largest employer in, in, in the state of Illinois is the federal government. The state of Illinois is the second, you know, it's very, I'm not sure if they're the second, but they're a very high employer. So they are very, you know, large.

Financial organizations now, and I'm sorry, boys and girls, but you're gonna have to now pay attention to them because otherwise they continue to expand [00:18:00] their size. They'll need more taxes to cover the, the services and benefits they provide and, and you need to make an educated vote. 

Bryan Hyde: Again, we are talking with Sheila a Weinberg.

She's a certified public accountant. She's also the founder and CEO of truth in accounting, Sheila. First of all, a tip of the hat for the great work that you're doing and, and once again for people who want to follow your work. The website is, 

Shiela Weinberg: our main website is Truth NIN, accounting Truth in accounting.org.

Our sister website is data c.org. 

Bryan Hyde: Thanks again for your time. 

Shiela Weinberg: Thank you, Brian. 

Bryan Hyde: This is the Prairie State Wire Podcast.