Tuesday, April 30, 2024
Year : 2, Issue : 18
Municipal governments across the United States are looking to rein in spending as pandemic-era stimulus dries up and inflation lingers for longer than expected.
“Clearly there are significant capital needs across the U.S.,” said Michael Rinaldi, senior director at Fitch Ratings’ public finance group. The group issued a AA investment grade general obligation bond rating for New York City in March 2024.
For example, New York City had a total public debt of $177.6 billion at the end of fiscal year 2022, according to researchers at Truth in Accounting, a nonprofit that partners with the University of Denver to promote transparency in public accounting. That translates into a per capita taxpayer burden of $61,200, according to the group’s analysis.
That estimate comes in higher than the one quoted by New York City Comptroller Brad Lander, who says the Big Apple has a public debt burden of roughly $96 billion in 2024 — about $30 billion shy of the city’s debt limit.
The discrepancy, according to Truth in Accounting, comes from pension debt obligations that are underreported and will eventually be pushed on to future taxpayers. “If I don’t pay that invoice, I don’t have to include it in my balanced budget,” said Sheila Weinberg, the group’s founder and CEO.
“I think we can all agree that we’re broke,” said Houston Mayor John Whitmire in a March 2024 City Council budget hearing.
Meanwhile, in the case of New York City, leaders remain optimistic about future returns.
Lander in 2024 voiced support for a $12 billion expansion of New York City’s debt limit to fund existing city services like community colleges and the police department, alongside an expansionary capital program in the face of issues such as the climate crisis.
In New York City, Mayor Eric Adams has introduced a “Program to Eliminate the Gap” which called for three separate 5% city program spending cuts that will affect services including sanitation, library access, public education, stewardships of jails and more.
In the spring of 2024, Adams walked back from portions of his spending cuts proposal, citing unexpectedly strong economic performance within the city.
Source: CNBC
