(The Center Square) — New York City tops the nation for having the worst municipal finances for the eighth year in a row, according to a new fiscal watchdog report.
The group Truth in Accounting’s 2025 Financial State of the Cities found the Big Apple’s financial condition worsened over the past year by an estimated $6.6 billion, resulting in a $56,800 per taxpayer burden and earning it an “F” grade.
“New York City’s elected officials repeatedly made financial decisions that have left the city with a debt burden of $184.2 billion,” the report’s authors wrote. “This growing liability puts additional strain on the city’s finances, complicating its ability to fund other services and programs.”
New York City’s per taxpayer “burden” is actually less than last year’s report, which the report’s authors attributed to a net increase in the number of taxpayers as the economy reopened following the pandemic.
“However, New York City’s financial condition actually declined…primarily driven by a $5.1 billion increase in liabilities from its retiree health care plan,” they wrote. “The plan operates on a pay-as-you-go basis, with only six cents set aside for every dollar of promised benefits.”
The report noted that while the city had 81 cents set aside for every dollar of promised pension benefits, less than six cents had been set aside for every dollar of promised retiree health care benefits.
Overall, the annual survey of the 75 largest U.S. municipalities found that a majority — or 54 — including New York City, did not have enough money to pay their outstanding bills.
Sheila Weinberg, founder and CEO of Truth in Accounting, said New York City and many other large and older cities owe billions of dollars to underfunded retirement plans for public sector employees.
“Most cities are financially underwater due to underfunded pension and retiree healthcare promises, leaving taxpayers and city workers at risk of higher taxes, reduced services, lower benefits, and long-term financial instability,” she said in a statement. “With mounting unfunded pension debt and growing reliance on federal support, Congress should consider extending Employee Retirement Income Security Act protections to cities to help mitigate these risks.”
