(The Center Square) – New York City is among the top five in the nation for having the worst municipal finances, according to a new fiscal report citing the city’s unfunded pension costs.
Truth in Accounting’s 2026 Financial State of the Cities, released nationwide Thursday morning, found the Big Apple had $95.7 billion available to pay $280.3 billion worth of bills by the end of 2024. That’s a $184.6 billion shortfall, which breaks down to a burden of $61,700 per taxpayer.
New York City earned a grade of F.
The report focused on New York and four other cities – Los Angeles, Chicago, Philadelphia and Houston – and researchers found that by the end of 2024 those cities didn’t have enough money to pay all their bills.
“This means that, to claim their budgets were balanced, as is required by law in the five cities, elected officials have not included the full cost of government in their budget calculations and have shifted costs onto future taxpayers,” they wrote.
Collectively, the five cities had $144 billion in assets available to pay bills. Their debt, including unfunded pension and other post-employment benefits, totaled $384 billion, resulting in a $240 billion shortfall, the report noted.
The report authors said the dire financial situation reflects “the long-term costs of pensions and retiree health care benefits continue to strain their financial health despite short-term improvements or varying circumstances.”
Collectively, the cities’ pension debt totaled $92 billion by the end of 2024, while other post-employment benefits, such as retiree health care, totaled $112 billion, according to the report.
“While investment gains have temporarily eased pension liabilities in cities like New York City and Houston, these gains remain unrealized and uncertain,” they wrote.
New York City, for example, has accumulated a retiree health benefit liability of more than $105 billion, according to the report. Meanwhile, the city’s elected officials and union leaders have also boosted already generous retiree health benefits as a way to reward and retain employees, further increasing the city’s long-term liability.
“This has occurred despite New York state’s efforts to increase accuracy and credibility in the city’s budgeting process, to avoid large long-term liabilities,” the report’s authors wrote.
The report’s authors noted that because budget writers in all five cities are generally focused on cash flow, promised pension and retiree health obligations did not have to be included in the spending plans.
“This allowed officials to offer future benefits to keep employees satisfied while still presenting balanced budgets to voters,” they wrote. “Over time, pension and retiree health obligations grew quietly, often obscuring the full scope of the problem.”
