(The Center Square) – The largest cities in Texas with the greatest taxpayer burdens are primarily run by Democrats, according to an analysis of financial data published by Truth in Accounting.
In the latest comprehensive analysis of the fiscal health of the 75 most populous cities in the U.S., 53 did not have enough money to pay all of their bills, or 70%, according to a Truth in Accounting analysis of the latest annual comprehensive financial reports from 2022.
Pension, healthcare and post-employment debt accounts for the majority of debt owed by cities, according to TIA’s eighth annual Financial State of the Cities report.
To show the impact to taxpayers of how officials budget and spend taxpayer dollars, for cities that don’t have enough money to pay their bills TIA divided the amount of revenue needed to cover those costs by the estimated number of taxpayers. This calculates “a taxpayer burden.” When cities have funds left over after paying their bills, TIA divided the amount by the estimated number of taxpayers to calculate “a taxpayer surplus.”
It also graded cities according to their fiscal health, taxpayer burden or surplus, balanced budget requirements, and other factors.
Of the 75 cities evaluated, only one percent received an A grade for fiscal health. The majority received D grades, followed by C and B grades, according to the analysis.
No Texas cities received an A grade.
Three reported taxpayer surpluses and received B grades: Plano ($5,100 taxpayer surplus), Corpus Christi ($1,500) and San Antonio ($900).
Plano and Corpus Christi ranked in the top 10 nationwide: third and tenth, respectively.
Of the seven Texas cities in the ranking, two are run by Republicans: Plano with a surplus and Fort Worth with a deficit.
Dallas reported the highest taxpayer burden, followed by Houston, Fort Worth, Austin, and El Paso. All are run by Democrats except for Fort Worth.
All received D grades for fiscal health except for El Paso, which received a C grade.
No Texas cities ranked in the bottom ten. Three cities ranked in the bottom 20 for having the greatest taxpayer burden: Dallas (13th worst), Houston (15th worst) and Fort Worth (20th worst).
Dallas had the greatest taxpayer burden of -$9,600, followed by Houston’s -$9,000 and Fort Worth’s -$7,400.
Austin ranked 25th worst with a taxpayer burden of -$6,400.
The report notes that Plano’s ranking may be “artificially high because of the lack of timely pension data.”
It also points out that “unlike most cities, Plano’s pension system reported unrealized investment gains based upon a measurement date when the markets were performing well. Over the past few years, investment market values have swung dramatically. This volatility demonstrates the risk to taxpayers when their city offers defined pension benefits to its employees. Unlike most cities, Plano’s pension and retiree health care plans were well funded.”
By contrast, Dallas had a $3.7 billion shortfall to cover its bills, a decrease of $1.9 billion from the previous year, according to the report.
According to Dallas’ 2022 financial report, officials used 2021 pension data when pension investments were performing well. “If the city’s pension investments experienced the same major decrease that most other cities experienced in 2022, Dallas’ pension debt would be higher,” the report states. “Over the past few years, investment market values have swung dramatically. This volatility demonstrates the risk to taxpayers when their city offers defined pension benefits to its employees.”
It also emphasizes that “continued market fluctuations, changing investment values, decreased COVID relief funds, and a stabilizing economy that may slow tax collections, could worsen the city’s financial health.”
Last fall, after failing to convince the Dallas City Council to cut spending and lower taxes, Dallas’ mayor switched from the Democrat Party to the Republican Party.
“It is simply not the case that we could not have significantly reduced the size of this budget and cut taxes without drastically cutting essential services,” he said, contradicting the claims made by proponents to increase taxes. “It is preposterous to suggest that our city government could not, by being more efficient, deliver essential services next year using the same amount of tax revenue collected from Dallas residents and businesses just a year ago.”
Instead, the city council passed the largest budget in city history resulting in an 8% property tax increase. Economists have warned that any attempts by the legislature to reduce property taxes will be wiped out by local governments that do not restrain spending.
