70% of largest U.S. cities lack cash to cover costs

In an eye-opening revelation from the latest city finance audits, an overwhelming majority of the United States’ largest cities faced a fiscal impasse in 2022, unable to settle their financial obligations with existing funds.

According to the eighth annual Financial State of the Cities report by Truth in Accounting (TIA), scrutiny of the 75 most populous cities laid bare a stark disparity — available assets totaling $307.4 billion were rendered insufficient against a towering debt of $595.3 billion.

New York City has the deepest taxpayer burden (-$61,800), followed by Chicago (-$42,900), Honolulu (-$24,200), Philadelphia (-$20,400), Portland (-$20,100), New Orleans (-$18,200), Miami (-$15,500), Milwaukee (-$15,300), Baltimore (-$14,100), and Pittsburgh (-$13,000).

Of the 10 cities with the greatest taxpayer burden, nine are run by Democrats.

The debt crisis, primarily composed of $175.9 billion in pension dues and $135.2 billion in post-employment benefits like healthcare, threatens to compromise the future fiscal stability of these urban centers.

To illustrate the repercussions on taxpayers, TIA calculates a “taxpayer burden” by dividing the total unpaid costs by the number of taxpayers in each city.

Conversely, when a city’s funds exceed its bills, a “taxpayer surplus” is determined using a similar division. The data unearthed that only a mere 1% of the cities secured an A grade for financial health, with the majority placed in lower categories of C and D grades

The report accuses officials of employing deceptive tactics to present ostensibly balanced budgets, thereby casting the shadow of debt onto future generations. The most prevalent gambit sidesteps the actual compensation costs tied to public service benefits.

Meanwhile, pledges made to pension and healthcare funds are swapped for short-term gains like tax cuts and funding for current programs — a precarious strategy that defers financial responsibility rather than addressing it.

Though federal COVID-19 relief funds and reopening economies boosted tax revenue, this was negated by escalating pension liabilities, exacerbated by market downturns. Such volatility underscores the inherent risk these pension arrangements pose to taxpayers.