A debate over an accounting practice is causing headaches for school board officials across the state.

The Public Employees Insurance Agency has instructed county school boards to list in their financial statements the cost of retirement health benefits promised to public employees.

All local governments whose retirees receive PEIA health benefits are now to keep track of what it will take to fully fund health benefits over 30 years. But school board officials say the state should accept liability for this debt.

School officials worry that publishing financial statements with deficits could put their school systems in danger of state takeovers and could affect bonding for construction projects.

The Attorney General's Office has decided to stay out of the matter but lawmakers may take action.