Truth in Accounting Releases Financial State of Cities
Truth in Accounting released their annual Financial State of the Cities report which breaks down the annual financial reports from the nation’s 75 most populous cities.
Notably, the report found that 63 of the cities did not have enough funding to pay all of their bills, meaning they deferred much of these costs onto future taxpayers. They also found that the collective debt for all 75 cities totaled more than $320 billion.
Unsurprisingly, most of this debt comes from unfunded retiree benefits like healthcare liabilities, which accounted for $149.8 billion, and pension benefits which totaled $176.2 billion.
The report also divided cities into sunshine cities, those with more than enough to pay their liabilities, and sinkhole cities, those without enough.
Plano and Arlington were the only cities in Texas to be considered “sunshine cities”. Plano has a taxpayer surplus of $2,800 per person while Arlington’s is $2,100 per person.
Coming in on the opposite side of that list was Forth Worth, which has a per taxpayer debt burden of $12,300 and Houston which is $11,600.
While all of the cities rated have requirements for balanced budgets, cities often skirt these regulations a number of ways. They can inflate revenue assumptions, count borrowed money as income, understate the true costs of government, or defer payments until the following fiscal year.
In terms of overall fiscal health, Houston ranked 60 out of the 75 cities ranked.
“Houston’s elected officials have made repeated financial decisions that have left the city with a debt burden of $7.9 billion. That burden equates to $11,600 for every city taxpayer,” read the report. “Houston’s financial problems stem mostly from unfunded retirement obligations that have accumulated over the years. Of the $19.1 billion in retirement benefits promised, the city has not funded $4 billion and $2.4 billion in retiree health care benefits.”