Most of the biggest cities in the United States are deep in debt, and Dallas’ situation ranks among the worst.
Fifty of the 75 largest cities in the U.S. are running at a deficit, and Dallas logged the eighth-highest municipal debt per taxpayer of any major city at the end of the fiscal year 2021, according to a report by Truth in Accounting.
The figure works out to $14,700 in debt per taxpayer in Dallas, according to the report, although the City has reduced its municipal debt by 31.9% from 2017 to 2021, according to ZeroHedge.
The report from Truth in Accounting gave Dallas a ‘D’ for fiscal health and said it needed $5.6 billion to pay its bills in 2021. This figure was $616.2 million higher than in 2020.
“After the Covid-pandemic, in large part due to unrealized gains in stock market valuation of its pension investments and federal government stimulus money, Dallas’ financial condition appeared to improve,” the report said.
The report found that Dallas’ pension liability increased because the City used outdated pension valuations that failed to take into account 2021’s short-term gains. Dallas only set aside 50 cents for every dollar of promised pension benefits and did not set any money aside for promised retiree health care benefits, according to the report.
The report added that the City of Dallas’ financial problems stem primarily from unfunded retirement obligations that have grown over time. It suggested further that the City could struggle to maintain current levels of government services and benefits without diving deeper into debt.
While major cities like Detroit in 2013 and Stockton, California, in 2012 made headlines after filing for Chapter 9 bankruptcy protection, the report did not suggest that Dallas was on course to suffer a similar fate.
“We’ve had cities go bankrupt in the past, but usually those are isolated events that occur because the city lost a big lawsuit or had a local catastrophe,” said Franklin C. Adams, a bankruptcy lawyer, according to Fox Business.
The cities with the highest budget surpluses per taxpayer were Washington D.C. ($14,000), San Francisco ($7,700), and Irvine, California ($5,400), according to the Truth in Accounting report.
