Thursday, February 22, 2024

Sunshine Cities and Sinkhole Cities

by Rod Williams, Feb. 22, 2024- At the end of the fiscal year 2022, 53 cities did not have enough money to pay all of their bills. This means that to claim their budgets were balanced—as is required by law in the 75 cities—elected officials have not included the actual costs of the government in their budget calculations and have pushed costs onto future taxpayers. Together, the 75 cities had $307.4 billion worth of assets available to pay bills; their debt, including unfunded retirement benefit promises, amounted to $595.3 billion. Pension debt totaled $175.9 billion, and other post-employment benefits (OPEB), mainly retiree health care, totaled $135.2 billion.

It should be noted that this is not a value judgement as to whether or not a city is overtaxed or undertaxed, if the city has the right priorities, or the quality of life in the city, but a measure of the fiscal soundness of the city. It asks the question, does the city has enough money to pay its bills.  

Nashville and Memphis are the only two cities included in the 75 cities graded and ranked. Both received a grade of "C." Memphis ranked 44th and Nashville ranked 48th out of the top 75 U.S. cities in the report.  If one looks at cities which may be consider peer cities of Nashville, Austin received a D grade, Charlotte a B, Jacksonville a D, Orlando a C, and Tampa a B. 

Certain cities have an excess of money to pay their bills and the TIA calls the best five of these "Sunshine Cites" and the five with the greatest deficits TIA calls "Sinkhole Cities." Below is that list.

To see the full report follow this link.

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