St. Louis Faces $967.5 Million Shortfall, Earning a “D” Grade

St. Louis’ financial condition showed some improvement in fiscal year 2023, but the city still faced a $967.5 million shortfall. This equates to a Taxpayer Burden™ of $9,800, earning St. Louis a “D” grade and classifying it as a “Sinkhole City” in Truth in Accounting’s latest report.

The city’s financial health was aided by strong revenue performance, including a $280 million Rams settlement and COVID relief funds. However, pension liabilities rose by $395 million due to unrealized investment losses recorded as of September 30, 2022. This data does not fully reflect the city’s 2023 financial standing, contradicting accounting principles that financial statements should present an accurate snapshot of finances at a specific point in time.

Taxes accounted for 42.4% of the city’s revenue, a decline from 58.5% the previous year. Despite this, overall tax revenue increased by $46.9 million, driven by higher sales and payroll taxes, reflecting wage growth and inflation. However, even with this economic boost, St. Louis still faced a funding gap to cover its existing financial obligations.
Key findings from the report include:

• St. Louis had $2.1 billion available to pay $3.1 billion in bills.
• The city’s financial shortfall amounted to $967.5 million, leaving each taxpayer with a $9,800 burden.
• Revenue growth improved finances, but pension liabilities and a funding gap remain concerns.

St. Louis will need to continue implementing sound financial strategies to manage rising obligations while sustaining its economic growth.

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