Most major California cities were in dire financial straits before the pandemic. Expect it to get worse

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It’s a bit like hiding credit card bills under the mattress and declaring that everything is fine: Cities, watchdog group, do not include true government costs in budgets they present to the public .

Truth in Accounting, a non-profit, non-partisan organization, is dedicated to translating impenetrable financial documents into a language anyone can understand.

Irvine Town Hall (Tomoya Shimura, Orange County Register / SCNG)

In the group fifth annual newsletter Of the 75 largest cities in the country, Irvine retains its title as the most fiscally sound city in America – even though the vast majority of its brethren, both in California and across the country, are running deeper into debt thanks to promises they made for pensions and retiree health care which is much more expensive than they ever imagined.

Stockton – a testament to the remedial power of municipal bankruptcy – and the city of Fresno joined Irvine in the dark.

In the red in California, from least indebted to most indebted, were Long Beach, Chula Vista, Bakersfield, Riverside, Sacramento, Los Angeles, San Diego, Santa Ana, Anaheim, San Jose, San Francisco and Oakland.

In total, the total debt of the 75 most populous cities exceeded $ 333.5 billion at the end of fiscal 2019. Most of that was in pension debt – $ 180.1 billion – while the remainder was for retiree health benefits, at $ 160.1 billion.

Aerial view of houses in a neighborhood of Irvine, taken on August 5, 2010.

Sunny cities

Beyond the beige that covers this metropolis on the master plan, Irvine is a dynamo.

With more than 287,000 inhabitants, this majority minority city – 43% Asians, 40% Whites, 10.3% Latinos, 5% of mixed race, 1.7% Blacks – has a population of nearly 70%. % of residents have a bachelor’s degree or higher and the median income exceeds $ 105,000 per year.

Good financial management has long been a priority, officials said.

Irvine’s “taxpayer surplus” – the money available to pay all of her bills, divided by the number of residents – was $ 4,100 per person for the fiscal year ending 2019.

This figure has remained stable from the previous year, but is down from $ 4,400 in 2017 and $ 5,200 in 2016. Next year’s surplus is expected to decline further due to the pandemic.

“Unlike most cities before the crisis, Irvine had enough resources, $ 370.3 million, to pay all of its bills, including public employee retirement benefits,” the watchdog said. “This means that Irvine’s elected officials have truly balanced their budgets.

Irvine relishes the crown.

“The town of Irvine is proud to be recognized for having maintained a strong financial record for the fourth consecutive year, particularly during the COVID-19 health crisis,” said Mayor Irvine Farrah N. Khan in a communicated. “This ranking confirms that city council and city staff remain committed to ensuring that taxpayer dollars are managed wisely.”

Stockton was the fourth healthiest country, with a surplus of $ 3,000 per person. Fresno was # 7 with a surplus of $ 2,300 per person.

Truth in Accounting calls these cities the “sunny cities”. There are only 13. The others are nicknamed “chasms”.

Sinking cities

A large Long Beach sign outside the Long Beach Harbor headquarters in the new Civic Center in 2019 (Photo by Scott Varley, Daily Breeze / SCNG)

The remaining 62 cities on the top 75 list are in the red, ahead of more than they have.

Long Beach, ranked No.14 overall, was getting closer to the sun before the pandemic struck. In 2016, its per capita deficit was $ 1,500, but it had declined significantly to just $ 100 per capita in the year under review.

“Long Beach entered the coronavirus pandemic with poor fiscal health, and it will likely come out of the crisis worse,” Truth in Accounting said. “Long Beach’s elected officials have repeatedly made financial decisions that have left the city with a debt burden of $ 20.2 million.”

Riverside Town Hall (Photo from Google Maps)

Riverside, No.28, had also made progress towards solvency. In 2017, he had a tax burden of $ 3,700 per person; which declined to $ 3,100. She, too, was in poor fiscal health before the pandemic and will likely come out of the crisis worse, the TIA said. Riverside elected officials left the city in debt of $ 330.7 million.

Los Angeles, at No. 38, also made solid progress. In 2014, the debt burden was $ 8,000 per person. It has been cut in half, to $ 4,000 per person, but it should also get worse. The city’s total debt burden was $ 5.1 billion before the pandemic hit.

Los Angeles City Hall is lit in dark blue lights as Dodgers fans celebrate with fireworks in October. (AP Photo / Damian Dovarganes)

At # 43, Santa Ana slipped. In 2016, its deficit per person was $ 3,400; who yawned at $ 5,400 per resident. “Santa Ana entered the coronavirus pandemic with poor fiscal health, and she will likely come out of the crisis worse,” TIA said. The city’s debt burden was $ 571.9 million.

The city, however, says the situation improved significantly at the end of fiscal 2020, falling to $ 3,047 per capita. “Of that amount, $ 2,621 per capita is long-term debt amortized over many years, to be funded in future periods,” spokesman Paul Eakins said via email. Current debt is $ 426 per resident, more than offset by cash and short-term receivables; and his general fund cash reserve balance exceeded $ 54 million, almost a quarter of what he spends in a year. Even with the pandemic, Long Beach was able to preserve its service levels and add funds for public safety, he said.

Anaheim, home to the happiest place on Earth and No.47, was running a deficit of $ 6,200 per person. It’s worse than in 2016, where it was $ 5,300 per capita, but not as bad as in 2017, where it was $ 7,200 per capita. He also entered the pandemic with poor fiscal health and is expected to suffer more. The debt burden was $ 696.1 million.

“We share and applaud the interest in the financial health of cities, although often reports like these can be too broad,” Anaheim spokesman Mike Lyster said. “Like many cities, Anaheim faces real pension obligations and fiscal impacts from the pandemic.

Anaheim Town Hall / File Photo

What is not captured is that Anaheim is a $ 2 billion urban enterprise with its own electric and water utilities, a public safety and convention center, and sporting venues, this which naturally comes with obligations, as well as income, that other cities may not have. And while the pandemic has brought short-term problems for Anaheim, our long-term future is bright with major investments planned around our theme parks and sporting venues and with millions of visitors waiting to return to our city an times they can do it safely. “

New York highs

The worst city in America, once again, was the Big Apple. New York had a staggering deficit of $ 68,200 per person. It has only increased since 2014 and is also expected to worsen after the pandemic.

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