Thursday, February 22, 2024

Nashville, Memphis given 'C' in Financial State of the Cities report

By Jon Styf | The Center Square,  Feb 19, 2024 - Nashville and Memphis were both graded a “C” in Truth in Accounting’s annual Financial State of the Cities report.

Memphis ranked 44th and Nashville ranked 48th out of the top 75 U.S. cities in the report from the think tank that analyzes government financial reporting.

The methodology is to examine the cities' bills, their respective number of taxpayers and determine if there is burden or surplus for each. Grades of "A" or "B" are given to governments making their balanced budget requirements; "C" for passing if it comes close; and "D" and "F" when it is not balanced and there are significant taxpayer burdens.

The new report looked at the comprehensive financial reports for cities through 2022 and found that Memphis went from having a surplus in 2021 to a burden of $4,000 per taxpayer in 2022 despite increased tax collections and federal COVID-19 funds.

“Memphis continued to spend large amounts of federal COVID-19 relief funds, and as the U.S. economy reopened the city took in additional tax revenue,” the report said. “Such economic gains were offset by significant decreases in the value of the city’s pension investments.”

Memphis has 94 cents set aside for each dollar of promised pension benefits and 51 cents per dollar of promised retiree health benefits.

Nashville, meanwhile, has a burden of $4,500 per taxpayer.

“While the pension liability increased due to a deterioration in the value of pension investments, the amount of promised retiree health care benefits decreased due to changes in benefit terms and changes in the way this OPEB debt was calculated,” the report said.

Nashville has just 8 cents set aside per dollar of promised retiree health benefits.

The 2022 Nashville numbers were an improvement in taxpayer burden of $6,800 per taxpayer.

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