‘Piggy bank for politically motivated spending’: America’s largest cities cannot pay their bills
Topline: America’s 75 largest cities are collectively $300.7 billion in debt, according to the annual “State of the Cities” report from nonprofit fiscal transparency and accountability organization Truth in Accounting.
Key facts: The report reviewed financial statements from fiscal year 2023 and found that 54 of the 75 cities were in debt.
New York City ranked the lowest by far. If New York wanted to pay off all its bills immediately — bonds, pensions and healthcare for current and future retirees, and other liabilities — it would need to collect an additional $56,800 from each of its taxpayers, according to Truth in Accounting.
Chicago would need to take $40,600 from each taxpayer to pay off its debt. Thirteen other cities, including New Orleans, San Francisco and Miami, would also need $10,000 or more from each person.
Washington, D.C. is in the best financial situation by Truth in Accounting’s metrics, ironic given the decades of fiscal mismanagement at the White House. The city could pay off all its bills today and still have $9,000 left over to give back to each taxpayer.
Cleveland and Tampa, Florida were also among Truth in Accounting’s top five “sunshine cities.”
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Background: Most cities in America have laws requiring that their budgets be balanced, but Truth in Accounting argues that officials often use a budgetary sleight of hand to hide their cities’ true debt.
Cities will eventually have to spend millions for pensions and healthcare that their current employees will have earned when they retire. Many cities are not doing saving what they should, instead treating the funds as a “piggy bank for politically motivated spending” and passing the costs to future taxpayers, according to Truth in Accounting.
Summary: With the recent focus on cutting federal spending, it’s important to remember that increased fiscal responsibility is just as necessary at the local level.
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