Wichitans carry a “Taxpayer Burden” of $1,200 per taxpayer, which is not as bad as many cities.
Truth in Accounting is an organization that works to improve the reliability and transparency of governmental financial information. 1 Annually, it produces a report titled Financial State of the Cities that examines the fiscal health of cities. The report does not take into account economic factors like economic growth, but instead compares a city’s assets with the bills it has accumulated.
Most cities, Wichita included, have a shortfall. The primary reasons for a shortfall are unfunded pension liabilities and unfunded post-employment benefits, called OPEB. TIA explains: “When cities do not have enough money to pay their bills, TIA takes the money needed to pay bills and divides it by the estimated number of city taxpayers. We call the resulting number a Taxpayer Burden and rank cities based on this measure.” 2 The report released this month is based on comprehensive annual financial reports (CAFR) for fiscal year 2018.
In the net, Wichita has a taxpayer burden of $1,200 per person, meaning “If retirement benefits or other costs are not reduced, then taxpayers could have to pay $1,200 in future taxes without receiving any related services or benefits. According to TIA, “Wichita’s financial problems stem mostly from unfunded retirement obligations that have accumulated over the years. Of the $1.5 billion in retirement benefits promised, the city has not funded $257.4 million in pension and $34.9 million in retiree health care benefits.”
Wichita ranks eighteenth among the nation’s 75 largest cities (the rank of one is best.) Wichita earned a grade of “C” along with 27 other cities.
In the previous year, Wichita ranked tenth, having a surplus of $800 per taxpayer.
By the way, the Government Financial Officers Association (GFOA) standard is for cities to publish their CAFRs 180 days after the end of the fiscal year. TIA says it is ideal for cities to publish within 100 days. Wichita published in 179 days.
- “The nonpartisan mission of TIA is to educate and empower citizens with understandable, reliable, and transparent government financial information. TIA is a 501(c)(3) nonprofit, nonpartisan organization composed of business, community, and academic leaders interested in improving government financial reporting.” See https://www.truthinaccounting.org/about/page/faqs-2. ↩
- Financial State of the Cities. Available at https://www.truthinaccounting.org/library/doclib/Financial-State-of-the-Cities-2020.pdf. ↩