The second annual release of the nonprofit financial transparency group Truth In Accounting’s (TIA) Financial State of the Cities report saw Long Beach earn a “C” grade for having more bills than it does money to pay them.
In the inaugural release of the TIA’s rankings Long Beach was just one of seven cities nationally that would have a surplus leftover if it paid all of its bills, with those figures being based off of 2015 financial disclosures. This year, Long Beach slipped a bit with its tax-payer surplus going away and its tax-payer burden—the dollar amount each tax-payer would owe if the city were to pay its bills at once—grew to about $1,500 per person.
This year’s data was based off 2016 disclosures and Long Beach ranked 20th out of the 75 cities included in TIA’s report on the 75 most populated cities in the country. The report found that those 75 cities combined had an unfunded debt of $335.4 billion, with a majority of that coming from pension debt ($210.7 billion) at the end of the 2016 fiscal year.
There were only 11 cities that had a tax-payer surplus with Irvine heading the list with a $5,200 per tax-payer surplus. Stockton was the only other California city to have a surplus, but despite not having a deficit, no city received an “A” grade on TIA’s report. Long Beach joined 23 other cities earning a C grade.
New York City rounded out the list with a whopping $62,500 tax-payer burden.
According to TIA, the Long Beach debt burden was $214.4 million with an unfunded pension cost of $1.1 billion and unfunded retiree healthcare benefits of $45.1 million. New laws went into effect in 2015 and 2018 that require states and cities to report those benefits, but TIA founder and CEO Sheila Weinberg said Long Beach won’t be one of those cities that experience a sticker shock next year.
“They are already putting that on their balance sheet,” Weinberg said. “So we commend them for doing that because they’re not hiding anything on their balance sheet anymore.”
That $45 million figure for retiree healthcare benefits, the item mandated to be disclosed as of 2018, would pale in comparison to other cities in California like Los Angeles ($2.7 billion) and San Francisco ($2.1 billion) which will now have to disclose those figures on their balance sheets going forward.
Weinberg said there is a chance that Long Beach could see a flip in next year’s report as the economy is strong and the city’s investments could be benefitting from it. Long Beach is currently projecting a nearly $16 million budget deficit for the 2019 fiscal year but is hoping that a charter reform, which could undo losses from a legal settlement over the city’s practice of charging fees to its utilities and transferring that revenue to the general fund, can help close the projected financial gap.
She said the hope is that these reports provide a little more transparency to cities’ financial operations, and in turn allow citizens to better participate in local government.
“We believe that city governments are being undermined because citizens are not being given the financial information they need to be knowledgeable participants in their city government,” Weinberg told the Post. “So by reporting these, posting them on our state data lab, we hope that citizens will look at their government’s financial condition, and once they see that they might ask for a change. But if they don’t even know the numbers, they’re not going to even knowledgeably say ‘Hey, we need to look more into our pensions and what’s being funded and how are the investments being managed.’”