Louisville’s Financial Health Strengthens, Earning a “B” Grade

Louisville’s financial condition improved in fiscal year 2023, earning the city a “B” grade from Truth in Accounting. With a $524.6 million surplus, Louisville remains classified as a “Sunshine City,” meaning it has more than enough money to cover its financial obligations. This equates to a Taxpayer Surplus™ of $2,600.

The city’s improved financial position was largely due to a $306.2 million reduction in its share of the Kentucky County Employees Insurance Fund’s retiree healthcare debt. Adjustments in actuarial estimates—considering factors like inflation, healthcare trends, and mortality rates—led to a more favorable financial assessment.
Additionally, the Kentucky Public Pension Authority enacted a 12.3% reduction in employer contribution rates for fiscal year 2024. While this provides temporary financial relief, it may slow the city’s ability to address its $1.1 billion in unfunded pension liabilities, presenting future fiscal challenges.
Key findings from the report include:

• Louisville had $2.6 billion available to pay $2.1 billion in bills.
• The city’s financial surplus grew to $524.6 million, equating to a $2,600 Taxpayer Surplus™.
• A reduction in retiree healthcare liabilities strengthened finances, though lower pension contributions could present long-term challenges.

While Louisville’s financial outlook has improved, balancing short-term relief with long-term pension obligations will be essential for maintaining fiscal stability.

For those interested in a deeper dive into Louisville’s finances—and how it compares to other major U.S. cities—you can read the full Financial State of the Cities 2025 report here.