Bill Gates accuses states of 'extreme' accounting tricks with budget
Microsoft founder Bill Gates talks state budgets Thursday at the TED Conference in Long Beach, California.
March 3rd, 2011
06:09 PM ET

Bill Gates accuses states of 'extreme' accounting tricks with budget

Bill Gates took on state officials across the country Thursday, accusing them of playing accounting tricks with budgets that even Enron’s executives wouldn’t have tried.

“The guys at Enron would never have done this, this is so blatant, so extreme,” said Gates, speaking at the TED Conference in Long Beach, California. “Is anyone paying attention to what these guys do?”

The Microsoft founder and philanthropist said the stakes in the growing deficits in states are huge because obligations to pay for health care and pensions for an aging population threaten to force huge cuts in education.

Gates used California’s budget as an example, pointing to the $25 billion shortfall faced by Gov. Jerry Brown when he took office this year. As health care takes up a larger and larger proportion of the budget, education spending would have to be cut in half to make up the difference. Gates cast that as a choice between paying the older generation versus investing in education for the young.

On paper, 49 states have to have balanced budgets. But Gates said that’s a “pretense” and that rather than balancing budgets, many states are playing tricks by borrowing, securitizing the proceeds from tobacco company settlements, and using one-shot tactics such as selling off state property to balance budgets.

While California spends more than $100 billion a year, far less brainpower goes into studying the accounting and the wisdom of spending decisions than at two much smaller enterprises - Microsoft and Google, Gates said. States should be held to the same accounting principles as those which apply to private companies, he said.

He said he will use his foundation’s website to publicize the facts about state budgets and suggested people read Marguerite Roza’s book “Educational Economics: Where Do School Funds Go?”to learn more.

“We need to care about state budgets because they are critical for our kids and our future,” said Gates, who has used the TED conference as a platform in recent years for his views on global health, education and energy. Gates also curated a session Wednesday at the conference, which is run by TED, a nonprofit dedicated to “Ideas worth spreading.”

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Filed under: Budget • Economy • Microsoft • Technology
soundoff (36 Responses)
  1. John Calif

    Considering neither side will cut what needs to be cut we're all %#*cked.

    March 4, 2011 at 5:37 pm | Report abuse |
  2. Ventura

    It doesn't stop at the state level either. Feds have even bigger tricks.

    March 4, 2011 at 10:26 pm | Report abuse |
  3. Beeker25

    In many respect Gates is correct that the states do resort to accounting tricks to balance the budget. Part of the problem stems from lack of transparency because it fits into an agenda of whoever is elected. Take Christie of NJ, he claimed he balanced the budget however neglected to mention that the current pension obligation was not funded while getting federal medicaid money to balance it. He stated that he is reforming it however it is equivalent to not paying the mortgage while working on a new mortgage with another bank. Banks, like any businesses, won't allow it and will declare you in default.

    March 5, 2011 at 1:24 am | Report abuse |
  4. Anthony Q

    Well, as more and more minorities and illegal immigrants fill this country to the brim, the great majority on welfare and having multiple children at the taxpayer's expense, it's only going to get worse and worse. So what does our super-genius governors and other fools do? They cut funding for the the future of this country: its education system. So as more and more illegitimate children, young minorities that refuse to work, and immigrants clog up our welfare and health systems, we must cut back on teaching the children that are here legally. Typical stupidity.

    March 5, 2011 at 7:14 am | Report abuse |
    • Ramon F Herrera

      "Well, as more and more minorities and illegal immigrants fill this country"

      Anthony, have you ever considered that there are 23,874,801 companies in America and that you cannot find ONE that agrees (publicly!) with your anti-immigrant views?

      March 5, 2011 at 8:44 pm | Report abuse |
  5. Ramon F Herrera

    I am beginning to forgive Bill Gates for all the tricks he played in his previous life period. Seriously.

    March 5, 2011 at 8:42 pm | Report abuse |
  6. Accounting ratios

    Training methods of microsoft office sales expert 2007 ; specialized accountancy providers * the main advantages of making use of one particular ; lower the weight of saving fiscal purchases ...Polskie biuro rachunkowe Londyn

    January 25, 2012 at 5:33 am | Report abuse |
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