Colorado Springs ranks at No. 27 in a new analysis of the fiscal health of the country’s 75 most populous cities, earning a “C” on its financial grading scale.
The city is one of 23 municipalities to earn C grades from the nonprofit government finance watchdog organization Truth in Accounting, each with a “Taxpayer Burden” of less than $5,000.
TIA defines the Taxpayer Burden as the amount of money each taxpayer would have to contribute for their city government to pay all of its bills.
The findings were released this morning in TIA’s “Financial State of the Cities” report, a nationwide analysis of cities’ 2016 Comprehensive Annual Financial Reports.
According to the report, “Decisions by [Colorado Springs] city officials have left the city with a debt burden of $504.8 million. … That burden equates to $3,100 for every Colorado Springs taxpayer.
“Colorado Springs’ overall debt largely consists of bonds payable, other current liabilities, and entitlement obligations in the form of pension benefits. The city has $636.8 million in unfunded pension promises and $47.5 million in unfunded retiree [health care] benefits.
“While Colorado Springs has promised these benefits, little money has been set aside to fund them.”
Most of the cities analyzed for the report have accumulated such burdens. Large sums of money have been pledged to city employees, teachers, police officers and other public servants, but the funds have not been set aside to finance the programs adequately.
“When a corporation promises an employee retirement benefits, it is legally required to set the money aside as the bills accumulate in order to ensure that the benefits can be fully redeemed. State and city governments are not required to follow this funding requirement,” according to a news release issued by TIA.
“Imagine for years telling your spouse that your family budget has been balanced. What would happen if you later found out that your credit card has a massive balance,” TIA founder and CEO Sheila Weinberg said in an email. “That is essentially what’s happening to the taxpayers of Colorado Springs. Instead of truly balancing the city budget, they have charged promised pension benefits to the taxpayers’ credit card. It’s deceptive to taxpayers and unfair to Colorado Springs’ public services.”
According to the report, Colorado Springs has $1.5 billion available in assets to pay $2 billion worth of bills.
“Despite reporting most of its pension debt, the city hides most of its retiree [health care] debt,” the report states. “The city’s total hidden debt amounts to $130.3 million.
“While better off that many other cities, Colorado Springs still owes more than it owns.”
The 23 cities that received “C” grades because of their Taxpayer Burden are:
El Paso, Texas: -$4,400
Santa Ana, Calif.: -$3,400
Colorado Springs: -$3,100
San Antonio: -$3,000
Riverside, Calif.: -$2,600
Fort Wayne, Ind.: -$2,500
Chula Vista, Calif.: -$2,100
Henderson, Nev.: -$2,100
Long Beach, Calif.: -$1,500
Oklahoma City: -$1,300
Corpus Christi: -$1,200
Las Vegas: -$1,200
Tulsa, Okla.: -$1,000
Bakersfield, Calif.: -$900
Louisville, Ken.: -$600
Greensboro, N.C.: -$100
Wichita, Kan.: -$100
According to the report, these financial challenges are not unique to the 23 “C” grade cities. In total, the 75 cities analyzed in the report have accumulated $335.4 billion in unfunded municipal government debt.
Based on TIA’s grading methodology, no cities received an A, 11 received a B, 23 received a C, 34 received a D, and seven cities received an F.
TIA also ranked the ‘Top 5 Sunshine Cities’ — those with a Taxpayer Surplus — including Irvine ($5,200) and Stockton ($3,000) Calif.; Lincoln, Neb. ($2,900); Charlotte, N.C., ($2,300) and Aurora ($1,700).
Its ‘Top 5 Sinkhole Cities’ — those with the worst Taxpayer Burdens — are Dallas, San Francisco, Philadelphia, Chicago and New York City. New York City’s Taxpayer Burden is a staggering $62,500 per taxpayer.
“The country is sitting on a ticking time bomb when it comes to unfunded municipal pensions and retiree health care obligations,” said Weinberg. “There’s going to be a day of reckoning though, and taxpayers have a right to know about these debts.”
Data for the report was derived from the cities’ audited 2016 financial reports and the actuarial reports of related retirement plans.