Contact: Katherine Oxenreiter, 312.589.5104
CHICAGO – Truth in Accounting (TIA), a Chicago-based think tank that analyzes government financial reporting, found that San Francisco’s taxpayer burden - the amount each taxpayer would have to pay for the city to be debt-free - comes out to a staggering $16,400. When ranked amongst the 20 most populous cities in the U.S., San Francisco has the fifth worst taxpayer burden.
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, San Francisco has committed to $2.3 billion in pension payments and $4 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, San Francisco’s reported pension liability increased from $0 in 2014 to $1.8 billion in 2015 and TIA calculations say that amount is still inaccurate.
“If San Francisco doesn’t recognize its alarming entitlement obligations then the burden will be passed on to taxpayers,” said Sheila Weinberg, Founder and CEO of Truth in Accounting. “Our analysis of the city’s financial reports indicate that the city continues to hide $509 million in pension debt despite the new accounting rule.”
TIA researchers also discovered that the city is hiding $2.1 billion in retiree health care obligations. When all unfunded liabilities and hidden debt are included, San Francisco’s total debt amounts to $4.1 billion after available assets are deducted.
“San Francisco needs to clean up its accounting reports,” said Weinberg. “I urge Mayor Ed Lee and his administration to level with taxpayers and let them know the true financial condition of their city.”
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 San Francisco’s finances can be found in The Financial State of San Francisco.
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.