San Francisco's financial ranking

In our latest review of the financial condition of the 20 largest cities in the United States, San Francisco 16th, or near the bottom.

This ranking is based on Truth in Accounting’s bottom-line “Taxpayer Burden” measure, which represents each taxpayer’s share of unfunded city debt. San Francisco has accumulated over $4 billion in bills above and beyond assets available on the balance sheet, leading to a $16,400 bill facing city taxpayers, on average.

Our “Taxpayer Burden” represents the long-term impact of debt accumulation in government retirement programs, as well as more recent results in annual spending compared to tax, fee, and grant revenue. It is no secret that California cities and the state itself have been leaders in the nationwide accumulation of large, unfunded employee retirement benefit obligations. In fact, several large California cities have actually entered Chapter 9 bankruptcy proceedings.

San Francisco still has at least one thing going for it, however – significantly economic growth, well above that for the other 19 cities in our analysis.

Consider some perspective from the private sector. Financial managers and CEOs always have to try to consider the right mix of debt and equity in their capital structure. Higher leverage, and debt, can be risky. But well-managed, relatively rapidly growing firms can shoulder higher debt than other firms, in part because debt can more likely be repaid, and be part of a reasonable investment in future growth.

San Francisco is no newcomer to the growth game. But compared to other relatively indebted larger cities, San Francisco’s growth engine, at least so far, appears to keep chugging along.