A new report on the financial condition of the 75 most populous cities

A new report on the financial condition of the 75 most populous cities ranks Washington, D.C. #1 in the nation. The report is based on the cities’ 2021 annual comprehensive financial reports, which are not analyzed on this scale by any other organization.

The analysis by Truth in Accounting, a nonprofit government finance watchdog group, found Washington D.C. has $3.5 billion available to pay future bills. This surplus equates to $14,000 for each city taxpayer.

According to the fiscal watchdog's annual Financial State of the Cities report, Washington D.C. had $4.7 billion in bills and $8.2 billion in available assets to pay those bills after capital and restricted assets were excluded. This resulted in a Taxpayer Surplus™, which is each taxpayer's share of the municipal surplus after its bills are paid.

While it appeared that Washington D.C. bettered its standing from 2020, the data can be deceiving. Based upon the city’s latest audited financial report for the fiscal year 2021, Washington D.C. had $3.5 billion available to pay future bills. The resulting surplus was $14,000 for each Washington D.C. taxpayer, earning the grade of "A" from Truth in Accounting. Importantly, the improvement included increases in the market value of pension assets, which are not considered spendable except to pay pension benefits.

The $3.5 billion available to pay Washington D.C.'s bills is an upgrade over last year’s report. The city’s fiscal improvement occurred primarily due to a temporary decrease in its pension liability. Washington D.C.'s pension liability is calculated by subtracting earned and promised benefits from the market value of pension assets. The pension assets' values were high based on an exceptionally good year in the markets in 2021. The result was a dramatic decrease in Washington D.C.'s pension liability and increased money available to pay future bills.

You can read the full report here and Washington D.C.'s individual report here.