BLUE CITY BLUES: 5 largest U.S. cities don’t have enough money to pay bills.

At the end of fiscal 2024, all five cities didn’t have enough money to pay their bills despite having balanced budget requirements. In order “to claim their budgets were balanced, as is required by law in the five cities, elected officials” didn’t include “the full cost of government in their budget calculations and shifted costs onto future taxpayers,” TIA said.

Combined, the five cities had $144 billion in assets; their combined debt, including unfunded pension and other post-employment benefits (OPEB), totaled $384 billion. Their combined shortfall was $240 billion, according to the analysis. This included $92 billion in pension debt and $112 billion in OPEB, mainly retiree health care, debt.

A “common and pressing challenge persists” in all five cities, the report notes: “long-term costs of pensions and retiree health care benefits continue to strain their financial health despite short-term improvements or varying circumstances.”

“While investment gains have temporarily eased pension liabilities in cities like New York City and Houston, these gains remain unrealized and uncertain,” it says. New York City’s growing retiree health care obligations “remain vastly underfunded,” as do the other cities’ it notes.

“Chicago exemplifies the consequences of chronic pension underfunding, with liabilities exceeding assets and recurring budget shortfalls,” it adds.

“Los Angeles and Philadelphia, which have made progress in funding, face limitations in financial flexibility due to increased capital investments and rising expenses,” it adds.

The report also grades each city based on its taxpayer burden. New York City and Chicago received F grades; Philadelphia received a D; Houston and Los Angeles received C grades for fiscal health.

Aside from bad finances, guess what else all five cities have in common.