How government waste and mismanagement are bankrupting America’s urban centers

By willowt // 2025-03-04

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A report by Truth in Accounting reveals that most of America’s 75 largest cities are in severe financial distress. Unfunded pension and retiree healthcare liabilities account for a significant portion of this debt, posing a long-term threat to taxpayers.
New York City, Chicago, Portland, New Orleans and Honolulu are among the worst offenders. These cities exemplify fiscal mismanagement, with leaders prioritizing short-term gains over sustainable budgeting.
The crisis stems from unfunded pension and healthcare liabilities, exacerbated by unpredictable factors like life expectancy, healthcare costs and investment performance. Current accounting practices obscure the true scale of the problem, enabling politicians to defer financial accountability.
Some cities, such as Washington, D.C., Lincoln, Nebraska and Irvine, California, have maintained taxpayer surpluses, demonstrating that responsible fiscal management is achievable even in challenging economic conditions.
The report calls for immediate action, including adopting full accrual accounting to improve transparency and addressing unfunded liabilities. Without reform, the growing debt burden threatens economic recovery and future generations, mirroring the federal government’s own fiscal challenges.

A shocking new report from Truth in Accounting reveals that the majority of America’s largest cities are drowning in debt, with taxpayers footing the bill for years of fiscal mismanagement and government waste. The report, which evaluated the financial health of the 75 largest U.S. cities, found that most are in the red, with New York City, Chicago, Portland, New Orleans and Honolulu leading the pack as the worst offenders. This is not just a story of numbers — it’s a story of broken promises, reckless spending and a betrayal of the American taxpayer.

Numbers don’t lie: A fiscal catastrophe

The report paints a grim picture: The 75 cities collectively have 321 billion in assets but owe a staggering 621.7 billion in debt, including unfunded retirement benefits. Pension debt alone accounts for 192.1 billion, while retiree healthcare liabilities add another 136.4 billion. These unfunded obligations are a ticking time bomb, threatening to cripple future generations with unsustainable financial burdens. New York City tops the list with a jaw-dropping taxpayer burden of 56,800 per resident. Chicago isn’t far behind, with each taxpayer on the hook for 40,600. Even cities like Portland and New Orleans, often lauded for their progressive policies, are fiscal disasters, with taxpayer burdens of 18,600 and 18,300, respectively. The report’s findings are a damning indictment of city leaders who have prioritized short-term political gains over long-term fiscal responsibility. As the report states, “Elected officials have not included the full cost of the government in their budget calculations and have pushed costs onto future taxpayers.” In other words, they’ve been cooking the books, and the people are the ones who will pay the price.

Unfunded liabilities and accounting tricks

The primary driver of this fiscal crisis is the growing burden of unfunded pension and retiree healthcare benefits. These liabilities now account for more than half of the cities’ non-capital debt, creating a financial black hole that grows deeper every year. The report highlights the inherent risks and uncertainties surrounding these obligations. Factors like life expectancy, inflation rates, healthcare costs and investment performance are notoriously difficult to predict, yet they play a critical role in determining the true cost of these benefits. For example, a reduction in the discount rate—used to calculate the amount needed today to cover future benefits—has already led to a notable increase in unfunded liabilities in more than 20 cities. Truth in Accounting has called on Congress to adopt full accrual accounting, which would provide a more transparent and accurate picture of government finances. As the report explains, this method “accounts for all financial obligations—both current and future—by recognizing expenses when they are incurred rather than when cash changes hands.” Without this reform, the true scale of the debt crisis will remain hidden, allowing politicians to continue kicking the can down the road.

Surplus vs. burden

While most cities are sinking under the weight of their debt, a handful have managed to maintain a taxpayer surplus. Washington, D.C., leads the way with a surplus of 9,000 per taxpayer, followed by Lincoln, Nebraska (4,300), Irvine, California (4,200), Tampa, Florida (3,400) and Cleveland, Ohio ($2,900). These cities prove that responsible budgeting is possible, even in challenging economic times. However, the vast majority of cities are in the red, with taxpayers bearing the brunt of their leaders’ poor decisions. In Chicago, where the taxpayer burden is 40,600, residents are paying the price for decades of political corruption and fiscal mismanagement. In New York City, the 56,800 burden per taxpayer is a stark reminder of the city’s bloated bureaucracy and unsustainable spending habits.

A warning for the future

This report is more than just a snapshot of America’s urban fiscal health—it’s a warning. The growing burden of unfunded liabilities threatens to undermine the economic recovery and saddle future generations with crippling debt. As the report notes, “These liabilities are laden with risks and uncertainties that often lie beyond the control of legislators, taxpayers and even those managing the plans.” The parallels to the federal government’s debt crisis are impossible to ignore. While the federal government reports its national debt at around 36 trillion, Truth in Accounting estimates the true figure is closer to 162 trillion when unfunded liabilities are factored in. This is a systemic problem that demands immediate action.

Time for accountability

The Truth in Accounting report is a wake-up call for city leaders, taxpayers and policymakers alike. It’s time to hold elected officials accountable for their fiscal mismanagement and demand real reforms, including full accrual accounting and a commitment to addressing unfunded liabilities. The American people deserve better than broken promises and hidden debts. They deserve transparency, accountability and a government that lives within its means. If people fail to act now, the consequences will be dire — not just for cities, but for the entire nation. As the report makes clear, the clock is ticking. The question is: Will the leaders finally step up, or will they continue to bury their heads in the sand while the debt grows ever larger? Sources include: JustTheNews.com AZDailySun.com WashingtonExaminer.com