by Jon Styf
Nashville ranked 68th out of the 75 largest cities in the U.S. in total debt per taxpayer, according to Truth in Accounting’s new Financial State of the Cities report.
TIA’s analysis examined the financial health of America’s 75 most-populous cities and calculated how much each resident would have to pay to cover all of their city’s bills. The calculations were based on fiscal year 2020 audited financial reports.
The analysis found debt increased during the start of the COVID-19 pandemic despite federal funding being available. The total debt in the 75 cities increased $23 billion in 2020 to $357 billion total.
The report showed 61 cities, including Nashville and Memphis, did not have enough money on hand to cover their bills before the pandemic. Memphis ranked 39th in total debt per taxpayer.
“The bottom line is that the majority of cities went into the pandemic in poor fiscal health and they will most likely come out of it even worse,” said Sheila Weinberg, founder and CEO of Truth in Accounting.
Nashville taxpayers have a burden of $19,800 per taxpayer, and Memphis had a burden of $4,800 per taxpayer.
Memphis was given a grade of C for its financial health with its total $934.7 million in debt.
“The city had set aside only 90 cents for every dollar of promised pension benefits and 35 cents for every dollar of promised retiree health care benefits,” the report said.
Overall, the report showed the city had $1.9 billion in funds available but carried $2.8 billion in debt.
Nashville, meanwhile, was given a grade of D in the report and ranked in the bottom 10 for financial health.
“Nashville’s financial problems stem mostly from unfunded retirement obligations that have accumulated over the years,” the report said. “While the city had set aside 93 cents for every dollar of promised pension benefits, only four cents had been set aside for every dollar of promised retiree health care benefits.”
Nashville had $4.4 billion in funds available but carried $8.4 billion in debt.
Fourteen cities had enough money to cover their debt, led by a $1.3 billion budget surplus in Washington, D.C. The other end of the spectrum was New York City, which had the worst debt of any city ($71,400 per taxpayer) for the sixth consecutive year, followed by Chicago and it’s $43,100-per-taxpayer debt. The average burden for the 75 cities was $7,731 per taxpayer.
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Jon Styf is an award-winning editor and reporter who has worked in Illinois, Texas, Wisconsin, Florida and Michigan in local newsrooms over the past 20 years, working for The Center Square, Shaw Media, Hearst and several other companies.
Photo “Nashville, Tennessee” by Derrick Brutel. CC BY-SA 2.0.
The good people of Nashville have had enough of the liberal politicians ( John and Jim Cooper, Bob Mendez) spending money on wasteful projects and becoming a liberal employment agency! Where is the Tennessee legislature with oversight over spending and financial health of metro government? Where is the Comptroller for Tennessee with oversight? What about criminal investigations of the waste, fraud and abuse? We need a law passed by the Tennessee legislature that forces any property tax increase over 3% to be put to a vote and approved by taxpayers in Nashville! Shelby County has a referendum in place for the taxpayers to approve large property tax increases! Please Speaker Sexton, interject the legislature in the liberal spending and poor financial health of Nashville with oversight and referendum based property tax increases. Sexton is our best hope to end the irresponsible spending!
It is a sad statement when Sexton is considered the best hope.
If worse comes to worst, and Davidson and Shelby Counties become unable to pay their bills, everyone knows who will have to pay their bills (i.e., it will be everyone else in the State of Tennessee). Both of these counties have demonstrated that they have little incentive to control their spending—massive spending. Perhaps the State should begin to plan for (to the extent that it has not already done so) how it will legislatively impose some kind of fiscal discipline on local governments in Tennessee to guarantee the payment of their bills that will minimize that burden on other more responsible Tennessee local governments and their citizens.
This is an issue for people far more knowledgeable than me to weigh-in upon. But it needs to be done as soon as possible while the problem is still relatively manageable. Tennessee cannot just ‘stick its head into the sand’ and hope that the problem will go away. It won’t. If anything, this problem will only become worse over time. What is that old adage—the failure to plan, is a plan to fail?