Contact: Katherine Oxenreiter, 312.589.5104
koxenreiter@truthinaccounting.org
CHICAGO – Truth in Accounting (TIA), a Chicago-based think tank that analyzes government financial reporting, found that Philadelphia has the third highest taxpayer burden amongst the 20 most populous U.S. cities. Philadelphia’s taxpayer burden - the amount each taxpayer would have to pay for the city to be debt-free - comes out to a staggering $27,500.
To determine a city’s taxpayer burden, TIA researchers use a systematic and thorough approach to get a complete picture of the city’s finances. Unlike reporting done by city government officials, TIA’s data includes all promised liabilities such as retiree health care and pensions. According to TIA’s analysis, Philadelphia has committed to $9.4 billion in pension payments and $2.2 billion for retiree health care, but the city has not adequately funded these obligations.
This year, TIA has noticed a dramatic increase in reported pension liabilities. New financial standards require the city to list the bulk of its pension obligations on the balance sheet for the first time. This rule increases transparency, but also produces a massive jump in reported debt statistics. For example, Philadelphia’s reported pension liability increased from $454.5 million in 2014 to $9 billion in 2015 and TIA calculations say that amount is still inaccurate.
“Philadelphia is making progress on increasing financial transparency, but they are still concealing $427.7 million in pension obligations,” says Sheila Weinberg, Founder and CEO of TIA. “Taxpayers may be on the hook for these liabilities if the city government continues to use accounting gimmicks to hide them from financial reports.”
TIA researchers also discovered that the city is hiding $668 million in retiree health care obligations. When all unfunded liabilities and hidden debt are included, Philadelphia’s total debt amounts to $14.3 billion after available assets are deducted.
“The disconnect between Philadelphia’s revenue and obligations is staggering,” said Weinberg. “I hope that Mayor Jim Kenney will continue phasing out the accounting gimmicks that have allowed them to conceal this vast city debt.”
Across all 20 cities, TIA researchers calculated a total of almost $263 billion in unfunded liabilities, a huge financial burden for taxpayers. TIA believes high debt and taxpayer burden are not abstract numbers: they’re linked with lower quality of life, poor highway systems, and the slow home price recovery.
Here’s how the top 20 most populous U.S. cities compare by taxpayer burden (ranked best to worst):
- Charlotte: $3,300 (surplus)
- Columbus: $2,700
- San Diego: $2,900
- Austin: $3,000
- San Antonio: $3,300
- El Paso: $3,700
- Denver: $4,300
- Indianapolis: $4,300
- Phoenix: $5,000
- Jacksonville: $6,100
- Seattle: $6,600
- Los Angeles: $7,400
- San Jose: $9,100
- Fort Worth: $9,700
- Houston: $11,700
- San Francisco: $16,400
- Dallas: $16,900
- Philadelphia: $27,500
- Chicago: $44,000
- New York City: $61,000
Full details about Philadelphia’s finances can be found in The Financial State of Philadelphia.
The Financial State of the Cities examines the financial conditions of the 20 most populated cities nationwide. The data is derived from each city’s 2015 Comprehensive Annual Financial Report.
Founded in 2002, Truth in Accounting is dedicated to educating and empowering citizens with understandable, reliable, and transparent government financial information. Sheila Weinberg is a Certified Public Accountant with more than 30 years of experience in the field.
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