Detroit gets ‘D’ grade for fiscal health pre-pandemic, 46th best city
(The Center Square) – A financial watchdog handed Detroit a “D” grade for its pre-coronavirus finances, landing them 46 out of 75 of the nation’s largest cities, on a scale from 1 being the most healthy to 75 being the worst.
On Tuesday, Truth In Accounting (TIA), a think tank that analyzes government financial reporting, released the 2021 Financial State of the Cities (FSOC) report.
TIA analysts draw their data from the fiscal year 2019-audited Comprehensive Annual Financial Reports.
TIA enacts this grading scale.
A Taxpayer Surplus greater than $10,000 received an “A,” given to no cities.A Taxpayer Surplus between $1 and $10,000 received a “B,” given to 13 cities.A Taxpayer Burden between $0 and $4,900 received a “C,” given to 28 cities.A Taxpayer Burden between $5,000 and $20,000 received a “D,” given to 28 cities.A Taxpayer Burden greater than $20,000 received an “F,” given to six cities.
Every Detroit taxpayer would have to hand over $6,100 to pay off the city’s total debt burden of $1.3 billion, and that was before the COVID-19 pandemic.
Detroit has promised $6.7 billion in retirement benefits but hasn’t funded $1.9 billion in pensions.
“They have a long-term cash shortfall, so they need to either start contributing more money in it or benefits will have to be reduced,” TIA CEO and founder Sheila Weinberg told The Center Square in a phone interview. “There’s not too many options.”
Detroit had $2.9 billion available to pay $4.2 billion of bills.
They aren’t alone in not having enough money to pay bills — 82.6% of the largest cities were in debt.
The average taxpayer burden across all 75 cities in the report works out to $7,355.
About 62 cities carried a wide range of debt before the COVID-19 pandemic, while 13 cities had more assets than liabilities.
Most large cities are projected to lose millions of dollars in revenue due to the coronavirus pandemic.
Top five financially healthiest cities:
Irvine, Calif., Taxpayer Surplus of $4,100.Washington, D.C., Taxpayer Surplus: $3,400Lincoln, Neb., Taxpayer Surplus: $3,400Stockton, Calif., Taxpayer Surplus: $3,000Charlotte, N.C., Taxpayer Surplus: $3,000
Other cities owe much more money.
Many larger cities owe billions of dollars to unfunded retirement plans for public sector employees.
Top five fiscal sinkholes:
New York City, N.Y., Taxpayer Burden: $68,200Chicago, Ill., Taxpayer Burden: $41,100Honolulu, Hawaii, Taxpayer Burden: $29,600Philadelphia, Pa., Taxpayer Burden: $25,700Nashville, Tenn., Taxpayer Burden: $22,000
“The bottom line is that the majority of cities went into the pandemic in poor fiscal health and they will most likely come out of it even worse,” Weinberg said.
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