Last week, Truth in Accounting released its fourth annual Financial State of the Cities report. The report found that only 12 of the 75 largest cities in the United States have a surplus. This means that the other 63 cities included in the report do not have enough money to pay their bills.
The cities are ranked based on their Taxpayer Surplus/Burden. Truth in Accounting divides the amount of money needed to pay bills by the number of city taxpayers to come up with the Taxpayer Burden. If a city has money available after all bills are considered, that surplus amount is likewise divided by the number of taxpayers to come up with the Taxpayer Surplus.
Altogether the 75 cities are $323.2 billion in debt. Furthermore, the cities have $176.2 billion in unfunded pension debt and $149.8 billion in unfunded other post-employment benefits (OPEB) debt.
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Irvine, California can claim to have the best city finances in the U.S. with a $380 million surplus. If you were hypothetically to divide that figure by the number of Irvine taxpayers, each taxpayer's share is $4,100. The other 11 surplus cities include the District of Columbia, Charlotte, Fresno, Plano, Stockton, Lincoln, Aurora, Arlington, Tampa, Raleigh, and Tulsa.
On the other end of the spectrum, four cities received an F grade in the report. To receive an F grade in the report a city has to have a Taxpayer Burden in excess of $20,000. None of the cities in the report received an A grade. To receive an A grade a city would have to have a Taxpayer Burden over $10,000.
The four cities that received an F grade and their respective Taxpayer Burdens are as follows:
- Philadelphia: $25,500
- Honolulu: $26,400
- Chicago: $37,100
- New York City: $63,100
New York City has the worst Taxpayer Burden of the 75 cities in the report by a $26,000 margin, and ranked last in the report. This is not new for New York City as the last three Financial State of the Cities reports have found that the city has a Taxpayer Burden of over $60,000.
Another aspect of city finances that the Financial State of the Cities analyzes is the timeliness of the financial reports. The standard set by the Government Financial Officers Association (GFOA) is 180 days after the fiscal year. Fifty-six out of 75 cities released their report within the 180-day standard with Columbus releasing their report soonest after the end of their fiscal year at 87 days. Seattle was the least timely of all 75 cities taking 301 days to release their financial report.
Even though 63 of the country's 75 largest cities are in debt, there is still some good news this year. "We have good news this year. The cities are finally reporting all of their liabilities on their balance sheets, including those related to retiree health care benefits," said TIA founder and CEO Sheila Weinberg. "The bad news is for every $1 of promised retiree health care benefits, the 75 cities have only set aside 13 cents to fund these promises."
To read the full Financial State of the Cities click here.