America’s Top Cities Swamped In Debt,
Chicago Leads The Way
Taxpayers in America’s ten
biggest cities face an average per taxpayer burden of $50,000 in debt incurred
by the county, state and or “off-balance-sheet” transactions by city government
entities, according to Truth in
Accounting (TIA).
The taxpayer burden, TIA
explains, is the amount residents would have to pay to cover all of a
government’s debt. “When the unfunded debt of these underlying government units
is combined with the county, municipal, and state debt, city taxpayers are on
the hook for much more than they think,” according to TIA.
The cities are ranked from
top to bottom, on net position, explained Bill Bergman, director of research
for TIA. “And it’s on that basis that Chicago ranks dead last,” he said.
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Taxpayers in America’s ten
biggest cities face an average per taxpayer burden of $50,000 in debt incurred
by the county, state and or “off-balance-sheet” transactions by city government
entities, according to Truth in
Accounting (TIA).
The taxpayer burden, TIA
explains, is the amount residents would have to pay to cover all of a
government’s debt. “When the unfunded debt of these underlying government units
is combined with the county, municipal, and state debt, city taxpayers are on
the hook for much more than they think,” according to TIA.
The cities are ranked from top
to bottom, on net position, explained Bill Bergman, director of research for
TIA. “And it’s on that basis that Chicago ranks dead last,” he said.
Chicago taxpayer burden equates
to $119,110 in debt per taxpayer, a number that includes debt from Chicago
Public Schools (CPS) and the state of Illinois. Bergmans said the most
significant burdens on taxpayers is from CPS. He added, CPS has separate
financial ledgers.
“As bad as the picture is for the city, you
add a significantly higher debt load once you include the Chicago Public
Schools,” he said.
The massive debt load could
affect Chicago’s S&P Global Ratings, was warned several years ago that its
rating could sink into junk unless it passes a budget that addresses the fiscal
situation.
“Taxpayers are on the hook for the debts
accrued by these underlying government entities, but you would not know it just
by looking at the reported data for the city,” the report states.
Following Chicago, New York
City’s combined Taxpayer Burden: $85,600; Los Angeles’ combined Taxpayer
Burden: $56,390; Philadelphia’s combined Taxpayer Burden: $50,120.
“The debt facing school districts in Dallas,
Houston and San Antonio don’t add nearly as much to the total debt burden
facing taxpayers in those cities as most others of the largest 10 cities we
studied,” Bergman added. “Still, one might have expected better overall
financial conditions for those Texas cities in light of economic and
demographic trends in the last decade.”
For these cities to pay off its
debt, each taxpayer would need to fork over around $50,000 each. Zerohedge
readers understand, 60% of millennials don’t
have $500 in savings ahead of the next recession. So
obviously this deadbeat generation that is expected to take over the workforce
by 2024 won’t have the ability to bail out America’s deadbeat cities in the
next downturn.
Which leaves us with the
question of the day: Will
the Federal Reserve bailout heavily indebted cities in the next crisis?
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