An accounting support fee collected to provide funding for the Governmental Accounting Standards Board has long had its critics, but one critic of both the fee and GASB in general believes such criticism might now find a more receptive ear in Washington.
The idea is significant because GASB, an independent standard-setting organization, establishes accounting and financial reporting standards for U.S. state and local governments that follow generally accepted accounting principles. While no federal law requires issuers to adhere to GASB standards, state laws and investor expectations mean that the vast majority of municipal issuers do.
The GASB Accounting Support Fee is collected on a quarterly basis from Financial Industry Regulatory Authority member firms that report trades to the Municipal Securities Rulemaking Board. A FINRA notice about the 2026 accounting support fee said FINRA would collect a total of about $15.8 million by collecting about $3.94 million for each calendar quarter.
Each member firm's assessment is based on its portion of the total par value of muni securities transactions reported by all FINRA-member firms to the MSRB during the previous quarter, according to FINRA's notice, which said the first quarterly collection would be in April.
Truth in Accounting, an Illinois-based think tank and a long-time GASB critic, believes the GASB Accounting Support Fee warrants re-examination because it provides "millions and millions and millions of dollars" to GASB "to set standards that are flawed," Judi Willard, TIA's communications and development manager, said in an interview Tuesday.
"And then when standards aren't even followed, GASB has no enforcement mechanism behind it," said Willard, author of a June letter TIA sent to the Securities and Exchange Commission.
In the letter, TIA expressed its "strong concerns regarding the GASB Accounting Support Fee and the broader role of" GASB itself. The letter urged the SEC to re-examine the fee and its implementation; to support broader scrutiny of the need for GASB and its standards; and to advocate for "full-accrual accounting that serves taxpayers, investors, and the integrity of our financial markets."
Section 978 of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act authorized the SEC to "require a national securities association registered under the Securities Exchange Act of 1934 to establish … a reasonable annual accounting support fee to adequately fund" GASB's annual budget.
In February 2012, FINRA, in accordance with an SEC order, established the GASB Accounting Support Fee.
"This 'stealth tax' has extracted over $35.8 million from the market economy in the past two years alone," TIA's letter, which described TIA as "a nonpartisan 501(c)(3) organization dedicated to promoting transparent government financial reporting and exposing the true costs of unfunded liabilities to taxpayers," said.
A March 2024 FINRA notice regarding the 2024 GASB Accounting Support Fee indicated that FINRA would collect a total of about $18.6 million. Similarly, a March 2025 FINRA notice concerning the 2025 accounting support fee said a total of about $17.3 million would be collected.
TIA believes the SEC needs to take a fresh look at the accounting support fee "because every taxpayer is being nickeled and dimed," from the federal, state and local levels, Willard said in the interview.
When GASB is responsible for setting standards for state and local governments and those standards aren't high enough to keep such governments "out of fiscal peril," TIA's concern is that the federal government will be tasked with bailing out those state and local governments, Willard said.
"Since Congress gave the GASB a sustainable funding source through these accounting support fees we believe they should exercise oversight of the GASB's standards since our research shows those standards are not strict enough or without enforcement mechanisms to keep cities and states from extreme fiscal distress," she said.
TIA is raising the issue now because it hopes the current administration in Washington would share its view and help to educate taxpayers about the true fiscal condition of the places they live and work in, Willard said in an earlier email.
The Bond Market Association, a broker-dealer trade association formerly known as the Bond Dealers of America, agrees with TIA that the GASB accounting support fee "is unfair and improper," Michael Decker, senior vice president for research and public policy at BMA, said.
"Of all the consumers of issuer financial statements that might be taxed to pay for GASB – issuers, investors, rating agencies, bond insurers, etc. – dealers are the least appropriate cohort on whom to impose this burden," Decker said when asked to comment on TIA's letter. "Moreover, there is no SEC or MSRB oversight of GASB and its budget process."
BMA supports revisiting the GASB accounting support fee "with an eye towards sharing the financial burden of GASB more fairly," he said.
In its June letter, TIA referenced a January 2012 comment letter the Securities Industry and Financial Markets Association submitted to the SEC regarding what at the time was FINRA's proposed rule change relating to establishing a GASB accounting support fee.
In its letter, SIFMA said while it supported GASB's mission, SIFMA believed that FINRA's proposed methodology for assessing the proposed accounting support fee was unfair and listed a number of reasons why.
Among the reasons SIFMA's 2012 letter cited was that the proposal was "an unfair tax on broker dealers and municipal bond investors who should not be mandated to subsidize the entire expense of financially supporting GASB."
In addition, many other end users of GASB's accounting and financial reporting standards – including among others non-debt issuing municipalities, banks, insurance companies and rating agencies – "get a 'free ride' under FINRA's proposed methodology," SIFMA's 2012 letter said, adding that the proposal would also provide GASB with "a blank check."
"There is no direct or indirect independent budget oversight - in effect 'taxation without representation' with no incentive for transparency or fiscal discipline," SIFMA's letter said.
In its June letter, TIA said it "fully agrees with SIFMA's critique" that the fee amounts to an unfair tax on broker-dealers and muni bond investors.
"TIA goes one step further in the interest of the American taxpayer: We question the ongoing necessity of GASB as a standard-setting body and urge the SEC to support scrutiny of its rules and/or existence," Willard said in the letter.
GASB's standards allow governments "to obscure the full scope of liabilities, particularly pensions and Other Post-Employment Benefits (OPEB), through modified accrual (cash-basis) accounting in governmental fund statements," TIA's letter said.
"This creates a self-destructive loop: GASB promulgates rules that obscure the truth about the very pension obligations bond buyers invest in, while the industry is forced to fund GASB's operations," the letter said. "The result harms transparency, distorts fiscal decision-making, and burdens future taxpayers."
The Financial Accounting Foundation, an independent private sector not-for-profit organization that is responsible for the oversight and administration of GASB, provided a statement Tuesday in response to a request for comment.
"Independence is central to the integrity of the standard-setting process," the statement said. "The Dodd-Frank law created, for the first time, reliable funding that is free from potential conflicts of interest to support GASB's standard-setting mission. The FAF Trustees are rigorous financial stewards and exercise careful, prudent oversight of GASB's operations."
