Financial State of the Cities 2021
From Truth in Accounting, January 26, 2021
Truth in Accounting has released its fifth annual Financial State of the Cities report. This comprehensive analysis surveys the fiscal health of the 75 most populated US cities prior to the coronavirus pandemic. The report found that 62 cities did not have enough money to pay all of their bills. Most of the cities were ill-prepared for any crisis, much less one as serious as what we are currently facing. Total debt among the 75 cities amounted to $333.5 billion at the end of the fiscal year 2019, which will only worsen as the cities face varying and unpredictable effects from the global pandemic.
Top 5 Sunshine Cities
1. Irvine $4,100
2. Washington, D.C. $3,400
3. Lincoln $3,400
4. Stockton $3,000
5. Charlotte $3,000
Bottom 5 Sinkhole Cities
71. Nashville -$22,000
72. Philadelphia -$25,700
73. Honolulu -$29,600
74. Chicago -$41,100
75. New York City -$68,200
**To read the full report, please click here to download the PDF**
Honolulu Finances Among Worst in Nation
Financial State of Honolulu, Hawaii
This report shows that Honolulu went into the coronavirus pandemic in dire fiscal health, and it will probably come out of the crisis worse. Based upon the city’s fiscal year 2019 audited financial report, Honolulu had a Taxpayer Burden™ of $29,600, earning it an “F” grade from Truth in Accounting.
Honolulu’s elected officials have repeatedly made financial decisions that have left the city with a debt burden of $3.5 billion. That burden equates to $29,600 for every city taxpayer. Honolulu’s financial problems stem mostly from unfunded retirement obligations that have accumulated over the years. Of the $9.1 billion in retirement benefits promised, the city has not funded $2.8 billion in pension and $2.2 billion in retiree health care benefits.
Honolulu did not have enough money set aside to weather the current pandemic and fluctuations in the market. The city is expected to lose some revenue as a result of the pandemic. The uncertainty surrounding this crisis makes it impossible to determine how much will be needed to maintain government services and benefits, but Honolulu’s overall debt will most likely increase.
Honolulu Financial Breakdown
• Honolulu had $2.7 billion available to pay $6.2 billion worth of bills.
• The outcome was a $3.5 billion shortfall, which breaks down to a burden of $29,600 per taxpayer.
• This means that each taxpayer would have to pay $29,600 in future taxes for which they would receive no related services or benefits.
THE CITY’S BILLS EXCEEDED ITS ASSETS
$15,610,224,000 -- Total assets
-$11,984,439,000 -- Minus: Capital assets
-$922,873,000 -- Restricted assets
$2,702,912,000 -- Assets available to pay bills
-$6,231,361,000 -- Minus: Total bills
-$3,528,449,000 -- Money available (needed) to pay bills
-$29,600 -- Each taxpayer’s share of this burden
BILLS THE CITY ACCUMULATED
$6,333,567,000 -- Bonds
$1,249,816,000 -- Other liabilities
-$6,378,749,000 -- Minus: Debt related to capital assets
$2,823,433,000 -- Unfunded pension benefits
$2,203,294,000 -- Unfunded retiree health care benefits
$6,231,361,000 -- Total bills
Bottom line: Honolulu would need $29,600 from each of its taxpayers to pay all of its bills, so it has received an “F” for its finances. According to Truth in Accounting’s grading scale, any government with a Taxpayer Burden greater than $20,000 receives an “F.”
The data included in this report is derived from the city of Honolulu’s 2019 audited Comprehensive Annual Financial Report and retirement plans’ reports. To compare cities’ financial information go to data-z.org.