Recently Truth In Accounting released their most recent Financial State of the Cities for 2022. This report analyzed the financial health of the top 75 cities in America during the COVID-19 pandemic. “The report found that 61 cities did not have enough money to pay all of their bills. Despite receiving federal assistance from the CARES Act and other COVID-19 related grants, the majority of cities’ finances worsened. Total debt among the 75 largest U.S. cities amounted to $357 billion at the end of the fiscal year 2020, which was $23.5 billion worse than the last fiscal year.”
Cities being worse off than preCOVID despite billions in aid and grants is a worrisome fact, but this was taking into account all of those big leftist cities, right? Surely in Texas, we faired better since we are a bastion of conservative principles and fiscal responsibility! Would it surprise you to know that every single one of our six most populous cities is insolvent? Dallas, Fort Worth, Houston, Austin, San Antonio, and El Paso could not pay their bills right now if asked to do so. Truth In Accounting labels cities that do not have enough money to pay their bills as “sinkhole cities.” They then take the total burden owed and divide it among the estimated taxpayers in the city, to show the burden carried by every citizen. Here are the burdens that each taxpayer in these Texas cities owe:
- San Antonio (32nd) – $1.48 billion in debt (-$3.1k/taxpayer)
- El Paso (40th) – $977.5 million in debt (-$4.9/taxpayer)
- Ft. Worth (52nd) – $2.5 billion in debt (-$9.3k/taxpayer)
- Austin (55th) – $3 billion in debt (-$10.3k/taxpayer)
- Dallas (58th) – $5 billion in debt (-$12.7k/taxpayer)
- Houston (60th) – $8.98 billion in debt (-$13.2k/taxpayer)
If we add all 6 of these cities’ total indebtedness the figure is roughly $22 billion in debt. Considering the last Texas budget was $248 billion for the biennium this means that just our top 6 cities are carrying debt equivalent to 9% of the entire state budget. This is a disturbing revelation that separates how the state budgets versus how our cities budget. Local debt is out of control in Texas and must be reigned in. This can be done legislatively in the next session and TFR will soon be offering solutions on how to run fiscally responsible cities that are accountable to taxpayers.
It is worth noting that Texas did have two “Sunshine Cities” in the report. These are cities that have enough money to pay their bills. The two Texas cities that were honored for their fiscal responsibility were:
- Plano (4th) – $233.2 million in surplus ($2.7k/taxpayer)
- Corpus Christi (11th) – $72.9 million in surplus ($800/taxpayer)
Texas taxpayers can never hope to achieve victories on things like eliminating property taxes that depend on things like cutting spending when there are such egregious budgeting shortfalls from our biggest cities. The fiscally irresponsible policies of our cities must be dealt with and they must be held accountable for their actions. Taxpayers do that at the ballot box. The first opportunity is coming on March 1st in the primary elections. TFR has created the Fiscal Responsibility Index that identifies how fiscally responsible your state lawmakers are. We encourage our subscribers to use this resource and share it with family and friends to aid in your decision casting your primary ballot. Together we can turn Texas and its cities into an example of responsible governance and fiscal policy!