Similar to state governments, city governments follow some sort of a balanced budget requirement. Unfortunately, in the world of government accounting, things are often not as they appear. America's largest cities have accumulated billions of dollars in debt by using accounting tricks like reporting borrowed money as income and delaying the payment of current bills until the start of the next fiscal year so they aren’t included in the budget calculations.
The most common accounting trick cities use is hiding a large portion of employee compensation from the budgeting process. Employee compensation packages include benefits such as healthcare, life insurance, and pensions. Unfortunately, some elected officials have used portions of the money owed to pension and OPEB funds to keep taxes low and pay for politically popular programs. This is similar to charging earned benefits to a credit card without having the money to pay off the debt. Instead of funding promised benefits now, they have been charged to future taxpayers. Taxpayers and citizens deserve the truth about city finances so they can make educated decisions at the voting booth.
Financial State of the Cities
This comprehensive analysis of the most populous US cities includes the most up-to-date city finance and pension data, trends across the cities, and key findings. The report is based on each city's audited Annual Comprehensive Financial Report and retirement plans’ reports.
City Combined Taxpayer Burden Report
This report analyzes the finances of each city, its county, state, and underlying government units. Taxpayers are not only on the hook for their federal, state, and city governments but also their county and underlying government units like school districts.
Compare data for various cities or see how data points interact within a specific city in our database.
City Financial Reports
Truth in Accounting has released an analysis of cities in the state of Michigan, including Detroit. Two page summaries for each of the 10 local governments can be found here.
More than $10 billion of promised retirement benefits were not reported on studied local governments' balance sheets, due to outdated accounting standards.
While most of these local governments appear to have positive financial positions, 20 have financial holes. The financial holes represent bills the local governments have accumulated beyond available assets. All of the 13 school districts studied have financial holes.
Cook County Study
For this project Truth in Accounting analyzed the financial condition of 518 primary taxing districts within Cook County, the second-most populous county in the United States and home to the City of Chicago. Data were derived from the most recent financial reports published on the Cook County Treasurer’s Web site on June 30, 2012.
The 518 taxing districts have a combined “financial burden” of almost $34 billion. Truth in Accounting determined the “financial burden” by subtracting liabilities the taxing districts have accumulated to date, including unfunded retirement liabilities, from the assets available to pay those liabilities.