Chicago City Wire

Chicago ranked as the second-worst city in the nation for its financial health during the 2019 fiscal year, according to a Truth in Accounting report. 

Truth in Accounting, a nonprofit conservative think-tank that provides an analysis of governmental fiscal data, recently made available its fifth annual Financial State of the Cities 2021 report analyzing the fiscal health of 75 of the most populated cities in the U.S. The calculations for these findings were made prior to the emergence of the COVID-19 pandemic.

According to the report, Chicago came in 74th place and received a failing grade, being called a “sinkhole city” as a result of debts totaling $36.4 billion, and would require every city taxpayer to contribute $41,100 to pay off those debts. Failing grades are given to city governments with a taxpayer burden greater than $20,000. 

Chicago was one of only six cities to receive a failing grade.

Unfunded retirement obligations are the main reason Chicago is in debt. While the city has promised $42.2 billion to these pensions, it has a $31.8 billion shortfall for benefits added with an $828.8 million shortfall for retiree health care benefits. 

Chicago had $10.05 billion in available funds to pay its $46.47 billion in bills at the time of analysis, according to Truth in Accounting. Truth in Accounting predicts that Chicago will come out of the coronavirus pandemic worse financially due to the city already being in dire fiscal health.

“Chicago did not have enough money set aside to weather the current pandemic and fluctuations in the market,” the report said. “The city is expected to lose some revenue as a result of the pandemic. The uncertainty surrounding this crisis makes it impossible to determine how much will be needed to maintain government services and benefits, but Chicago’s overall debt will most likely increase.”

The total debt for all 75 ranked cities at the end of the 2019 fiscal year was $333.5 billion, with 62 cities not being able to pay their bills.

The full report can be downloaded from the Truth in Accounting website.