(The Center Square) – A financial watchdog released a new report finding that every Minneapolis resident would have to pay $2,800 to clear the city’s debt.
Truth In Accounting, a think tank that analyzes government financial reporting, released the 2024 Financial State of the Cities report.
Minneapolis ranked 36th out of 75 of the nation’s largest cities, on a scale from 1 being the most healthy to 75 being the worst.
The report ranked cities based on data from the fiscal year 2022 Comprehensive Annual Financial Reports from the nation’s 75 largest municipalities and ranked them with this grading scale.
A grade: Taxpayer Surplus greater than $10,000: 1 cityB grade: Taxpayer Surplus between $5,000 and $9,999: 21 citiesC grade: Taxpayer Burden between $0 and $4,999: 26 citiesD grade: Taxpayer Burden between $5,000 and $20,000: 22 citiesF grade: Taxpayer Burden greater than $20,000: 5 cities
Despite cities having some form of a balanced budget requirement, at the end of the fiscal year 2022, 53 cities didn’t have enough money to pay all of their bills – costs that will be pushed onto future taxpayers.
For example, Minneapolis had $1.2 billion available to pay $1.7 billion worth of bills.
Washington, DC, which ranked No. 1 among the 75 largest cities, had a surplus of $2.8 billion. If divided by the number of DC taxpayers, hypothetically each taxpayer’s share is $10,700, or a taxpayer surplus.
Many larger and older cities owe billions of dollars to underfunded retirement plans for public sector employees.
For the seventh year, New York had the worst municipal finances with a taxpayer burden of $61,800.
“Cities should focus on overfunding their retirement plans so they can weather market downturns,” TIA Founder and CEO Sheila Weinberg said in a statement. “If elected officials choose to ignore this perpetual issue, then taxpayers will be on the hook to pay higher taxes to cover the benefits promised to past government employees.”
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, mainly retiree health care, totaled $135.2 billion.
