The Big Apple’s Finances Are Rancid, Accounting Group Contends. The New York City government, says financial watchdog Truth in Accounting (TIA), is a money mess.
Its finances are the most troubled in America, TIA charges, although other cities also have problems.
New York’s books, TIA claims, aren’t balanced as required by law. That’s because it doesn’t currently count all its bills, it says. For decades. the city’s leaders, TIA says, have disguised how much the taxpayers owe for pension and health care debts, called other post-employment benefits (OPEB).
New York City’s leaders disagree. They say city finances are good, citing strong bond ratings.
But TIA, in its new report, “Survey of the Cities 2022,” gave the Big Apple the worst grade and bad grades to other big cities.
“Based upon the city’s fiscal year 2020 audited financial report, New York City had a Taxpayer Burden of $71,400, earning it an ‘F’ grade from Truth in Accounting. New York City’s elected officials have repeatedly made financial decisions that left the city with a debt burden of $204.4 billion.”
“The city,” the TIA report continued, “had set aside only 78 cents for every dollar of promised pension benefits and three cents for every dollar of promised retiree health care benefits.”
An official of a New York City fiscal group, the Citizens Budget Commission (CBC), told The Epoch Times the city’s current budget is balanced but the long-term pensions/health care funding problem is “a real concern.” Still, CBC Deputy Research Director Ana Champeny says New York is making progress on long-term budget problems.
“One of the biggest factors leading to NYC poor showing,” says Champeny who read the TIA report, “is its post-employment benefit (OPEB) unfunded liability, which currently exceeds $100 billion.” She adds that “this is both a function of the City’s generous retiree benefits and the lack of funding for this liability. CBC has advocated for both reducing the cost of benefits and higher funding.”
Champeny agrees New York has OPEB problems, but adds the city is on course to catch up on these debts by 2034. She contends the city “is more than able to pay” current bills.
Others examining the spending practices of big cities like New York are skeptical.
Sheila Weinberg, TIA founder, says, “While the city is committed to wiping out the pension debt by 2034, it doesn’t negate the fact that they have a liability now. Think of it like a credit card balance. While you plan to pay it off over the coming years, it doesn’t mean you don’t have a balance now.”
New York City leaders say finances are sound, citing strong current bond ratings. City Comptroller Brad Lander declined interviews with The Epoch Times as did Mayor Eric Adams.
However, in previous comments and reports, Lander and other city officials point to a strong bond rating (pdf).
“The debt and liability profile incorporates pension and OPEB funding and analysis. When we consider the city’s rating, we compare it to other municipal governments across the U.S. also rated AA/stable,” according to the most recent S&P report.
“The AA/stable reflects many things including our view of the city’s economy, management, budgetary performance, flexibility and debt and liability profile,” Nora Wittstruck, S&P Global primary analyst for New York City, told The Epoch Times. Moody’s also gives the city a strong bond rating.
Last year, as S&P and Moody’s affirmed the city’s healthy bond ratings, then-Mayor Bill de Blasio, declared the city economically healthy.
“New York City is resilient and we’re coming back strong,” he said.
Lander, in a December report on city finances, said debt service will rise in a few years.
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Kari is an ex-Community Organizer who writes about Cultural Marxism, grassroots activism, music, IndyCar racing and political campaigns. @Saorsa1776
