Among the 75 largest municipalities in the U.S., New York City’s fiscal health ranks last for the third year in a row, according to the 4th annual "Financial State of the Cities” report published by the nonprofit educational organization Truth in Accounting (TIA).
“We estimate that New York City accounts for about 15 percent of the total income taxpayer filings in these 75 cities, but it accounts for about TWO-THIRDS of total debt reported by the 75 cities as ‘Other Post-Employment Benefits’ (OPEB)," Bill Bergman, Director of Research at TIA, told The Center Square. "New York City has more than $100 billion in OPEB liability,”
Twelve of the largest cities in the U.S. counted surpluses in 2019, while 63 cities don’t have enough to pay their bills, according to the analysis.
The 188-page report provides the most comprehensive analysis of city finances nationwide using previous years as comparisons.
The report surveys the fiscal health of the 75 largest municipalities in the U.S., drawing from 2018 data derived from audited Comprehensive Annual Financial Reports on file in city halls nationwide. It grades them according to how they balanced their respective budgets, whether officials include the true costs of the government in their budgets, and other measures.
No cities received an A, 12 received B’s, 27 received C’s, 32 received D’s, and four cities received failing grades. New York City received an F grade.
New York City reported the worst municipal finances in the U.S. for the third consecutive year. Every taxpayer in New York City would owe $63,100 in order to pay off the city’s debt and bills. TIA divides the amount of money needed to pay bills by the number of city taxpayers to calculate the taxpayer burden.
“New York City’s elected officials have made repeated financial decisions that have left the city with a debt burden of $186.7 billion,” the report states.
The city’s financial problems stem primarily from unfunded retirement obligations that have accumulated over time. Of the $321.1 billion in retirement benefits promised, roughly $51 billion in pension and $106.1 billion in retiree health care benefits remain unfunded.
TIA notes that New York City and other cities have become more transparent over the past few years because the Generally Accepted Accounting Principles (GAAP), set by the Governmental Accounting Standards Board (GASB), now require governments to disclose pension (GASB 68) and other post-employment (GASB 75) benefits on their balance sheets.
Government reports are lengthy, cumbersome, and sometimes misleading documents, TIA notes. Its mission is to provide understandable, accurate and transparent financial information to taxpayers to become involved and hold accountable their government officials.