Honolulu Ranks No. 72 for Fiscal Health

from Truth in Accounting, January 29, 2019 (pgs 166-7)

A new analysis of the latest available audited financial report found Honolulu has a Taxpayer Burden™ of $23,000, earning it an "F" grade based on Truth in Accounting’s grading scale.

Honolulu's elected officials have made repeated financial decisions that have left the city with a debt burden of $2.8 billion, according to the analysis. That equates to a $23,000 burden for every city taxpayer.

Honolulu's financial problems stem mostly from unfunded retirement obligations that have accumulated over many years. Of the $7.8 billion in retirement benefits promised, the city has not funded $2.5 billion in pension and $2 billion in retiree health care benefits.

Here's the truth:

• Money needed to pay bills $2.8 billion
• Taxpayer Burden -$23,000
• Financial grade ‘F’

Data included in this report is derived from the city of Honolulu 2017 audited Comprehensive Annual Financial Report and retirement plans' reports.

HONOLULU FINANCIAL BREAKDOWN

FAST FACTS

+ Honolulu has $2.7 billion available in assets to pay $5.5 billion worth of bills.

+ The outcome is a $2.8 billion shortfall and a $23,000 Taxpayer Burden.

+ Honolulu's reported net position is overstated by $1.1 billion, largely because the city delays recognizing losses incurred when the net pension liability increases.

GRADE: F

Bottom line: Honolulu would need more than $20,000 from each of its taxpayers to pay all of its bills, so it has received an "F" for its finances from Truth in Accounting

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Link: 2019 Financial State of the Cities

Link: 75 Largest US Cities Ranked by Taxpayer Burden

• 75th -- New York City Taxpayer Burden: $64,100
• 74th -- Chicago Taxpayer Burden: $36,000
• 73rd -- Philadelphia Taxpayer Burden: $27,900
• 72nd -- Honolulu Taxpayer Burden: $23,000
• 71st -- San Francisco Taxpayer Burden: $22,600

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Twelve of the Largest U.S. Cities Count Taxpayer Surpluses

News Release from Truth in Accounting, January 29, 2019

CHICAGO — The 2019 Financial State of the Cities surveyed the fiscal health of the 75 largest municipalities in the United States. This data is released today by Truth in Accounting (TIA), a think tank that analyzes government financial reporting. TIA draws their data from the latest audited comprehensive annual financial reports on file in city halls across the country, which have not previously been analyzed on this scale.

The 2019 FSOC report found that twelve of the largest cities have more assets than obligations, a key indicator of long-term financial health. The remaining 63 cities carried varying levels of debt, many of them in the billions of dollars range.

These new findings are notable for several reasons. First, Truth in Accounting’s rigorous methodology cuts through common bookkeeping gimmicks to present data free of political distortions. Second, this survey allows the public to gauge financial health accurately from one city to the next, and consistently going back several years.

Irvine, Calif., claims the best city finances in the U.S. with a $377 million fiscal surplus. Hypothetically, if you were to divide that figure by the estimated number of Irvine taxpayers, everyone would get a $4,400 check in the mail.

Not every city in the U.S. is so lucky. Many larger and older cities owe billions of dollars to unfunded retirement plans for public-sector employees. New York City claimed the prize for worst municipal finances in the U.S. for the third year in a row. Every taxpayer in the Big Apple would have to pay $64,100 in order for the city to pay off all its bills. Chicago (second worst in the nation) would need each taxpayer to pay $36,000. The average taxpayer burden across all 75 cities in the report works out to $7,500.

“Taxpayer Burdens occur when politicians decide to make promises on paper without fully funding the programs on the balance sheet,” said TIA founder and CEO Sheila Weinberg. “The result is disingenuous to civil servants who are counting on many of these retirement programs, and a betrayal of future generations who may have to pay for them.”

The Financial State of the Cities report is an in-depth study of the financial conditions in America’s largest cities for the most recent fiscal year. Data for this report was derived from cities’ 2018 financial reports and related retirement plans’ reports, using the most up to date information available.

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Founded in 2002, Truth in Accounting is dedicated to educating and empowering citizens with understandable, reliable, and transparent government financial information. Sheila Weinberg is a Certified Public Accountant with more than 30 years of experience in the field.