LOS ANGELES (CNS) - A report released today by the nonpartisan Truth in Accounting think tank ranked Los Angeles' municipal finances in the middle tier of large U.S. cities, while Irvine was ranked the best in the country.
The study analyzed the 2019 financial status of the United States' 75 most populated cities, which had a combined debt of $333.5 billion.
According to the data, Los Angeles would need $4,000 from each taxpayer in order to pay off its $5.1 billion debt that year, putting its municipal finances at 38th among the cities. Researchers said the financial troubles “stem mostly from unfunded retirement obligations that have accumulated over the years.''
L.A. had funded only $8.5 billion in pension and $2.7 billion in retiree health care benefits, while it has promised $67.4 billion in retirement benefits, according to the report.
Researchers said “Los Angeles went into the coronavirus pandemic with mediocre fiscal health, and it will probably come out of the crisis worse.''
“Los Angeles' elected officials have repeatedly made financial decisions that have left the city with a debt burden of $5.1 billion. That burden equates to $4,000 for each city taxpayer.''
Overall, the city had $21.4 billion worth of bills in 2019 and only $16.3 billion available. The city received a “C' grade from Truth in Accounting's report.
L.A. was not the only California city unable to pay its debt. Long Beach ranked 14th, with a taxpayer burden of $100; Chula Vista ranked 20th, with a taxpayer burden of $1,100; Bakersfield ranked 22nd, with a taxpayer burden of $1,400; Riverside ranked 28th, with a taxpayer burden of $3,100; San Diego ranked 40th, with a taxpayer burden of $4,700; Santa Ana ranked 43rd, with a taxpayer burden of $5,400; and Anaheim ranked 47th with a taxpayer burden of $6,200.
Irvine was ranked as having the best municipal finances in the country, with a $370.3 million surplus, or $4,100 per taxpayer. Despite being first in the U.S., it still received a “B'' grade from Truth in Accounting.
“Irvine remains first in our ranking for the fourth year and deserves recognition for maintaining a strong financial record,'' the report said.
“Once again the city's reported revenues exceeded its expenses. The city had some money set aside to weather the current pandemic, but economic downturns could adversely affect future tax revenues and the value of assets being held in retirement plans, which could diminish or eliminate the city's surplus.''
Two other California cities had a surplus in 2019: Stockton, which ranked fourth, had a taxpayer surplus of $3,000, and Fresno, which ranked seventh, had one of $2,300.
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