(The Center Square) – According to a report released Thursday, three of Ohio’s four largest cities do not have enough money to cover all of their outstanding bills.
Only Cleveland operates in a taxpayer surplus, according to the Truth in Accounting Financial State of the Cities Report, while Columbus, Cincinnati and Toledo taxpayers all face a tax burden of thousands of dollars.
“The good news is that, unlike most cities in the study, the cities set aside money to pay promised retiree health care benefits, so future taxpayers will not be burdened as much with paying for the benefits of people who worked for prior taxpayers,” Sheila Weinberg, founder and CEO of Truth in Accounting said.
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: one city.B grade: Taxpayer Surplus between $5,000 and $9,999: 21 cities.C grade: Taxpayer Burden between $0 and $4,999: 26 cities.D grade: Taxpayer Burden between $5,000 and $20,000: 22 cities.F grade: Taxpayer Burden greater than $20,000: five cities.
Cleveland ranked 21st with a grade of B and an individual taxpayer surplus of $300. The city had $2.64 billion to pay $2.61 billion worth of bills.
The news wasn’t as good for Cincinnati, Columbus and Toledo taxpayers.
Columbus ranked 38th with a grade of C, and taxpayers carry a burden of $2,900. Ohio’s most populous city had $2.7 billion to pay $3.6 billion worth of bills.
Toledo ranked 40th with a grade of C. The report showed taxpayers carry a burden of $3,200. The city has $761.4 million to pay $1.1 billion worth of bills.
Things are even worse for Cincinnati, according to Weinberg.
Cincinnati ranked 52nd with a grade of D and taxpayers individually owing $6,700. It had $1 billion to pay $1.7 billion worth of bills.
But, not all the city’s information was available.
“[Cincinnati’s] finances are worse than indicated in the report because 2022 pension data was not available,” Weinberg said. “Not having up-to-date pension data is like a person going to the bank and asking for a loan based upon their credit card debt of a year ago.”
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.
Washington, D.C., which ranked No. 1 among the 75 largest cities, had a surplus of $2.8 billion. Hypothetically, if divided by the number of the district’s taxpayers, each taxpayer’s share is $10,700.
Many larger and older cities owe billions of dollars to underfunded retirement plans for public sector employees.
New York had the worst municipal finances for the seventh year, with a taxpayer burden of $61,800.
“Cities should focus on overfunding their retirement plans so they can weather market downturns,” Truth In Accounting 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.”