Chicago, Feb. 03, 2023 (GLOBE NEWSWIRE) -- Press Release: Truth in Accounting will release its annual Financial State of the Cities report on February 7th in conjunction with a webinar at the University of Denver.
Embargoed Copy of the Financial State of the Cities Report is attached here.
This year's report had some shocking results!
San Francisco moved in ranking from 67 to second, and Los Angeles went from 44th to fourth! In a nutshell, there were record gains in the stock market in 2021. For instance, the Los Angeles Fire and Police Pension System experienced unrealized gains of 32.56%, which caused the pension system to appear overfunded. On the other hand, the San Francisco City and County Employees' Retirement System investment income was $9 billion, based upon a rate of 35.45%.
So, what accounts for these drastic improvements?
The answer lies in pensions and market volatility. Please read our full reflections on the issue.
These gains of over 30% caused us to do some more research. What were these pension plans investing in that saw such great returns?
One of the answers is FTX.
According to Equable, "At least 15 public pension' funds' managing the assets of 36 retirement systems had made investments in FTX. These investments were made through venture capital or private equity firms."
Our report is an analysis of the annual comprehensive financial reports from 2021, so the report we release on February 7th will reflect these
record stock market gains. However, those gains were lost in 2022. For example, the investments in the Los Angeles Fire and Police Pension System experienced a 7.23% loss in 2022.
People need to understand how stock market volatility can affect the bottom line of government finances. For example, do you remember when California Governor Newson claimed a $47.5 million surplus? This can lead to elected officials starting new programs they can't afford long-term to win votes. Our goal at Truth in Accounting is to show citizens the reality of government finances so they can be knowledgeable participants in the budget process.
Currently, their accounting standards allow them to put off paying bills, list borrowed money as revenue, and not list their pension & OPEB liabilities in their budget.
Our report exposes these flaws and shows citizens the truth about the finances of the cities where they live and are trying to thrive. Therefore, it is only fair they are knowledgeable in order to advocate for the appropriate policies and elected officials.
Our report ranks each city based on its Taxpayer Burden or Taxpayer Surplus. A Taxpayer Burden is the amount of money each taxpayer would have to contribute if the city were to pay all of its debt accumulated to
date. Conversely, a Taxpayer Surplus is the amount of money left over after all of a city's bills are paid, divided by the estimated number of taxpayers in the city. We split the cities into two groups. Cities that
lack the necessary funds to pay their bills are called Sinkhole Cities, while those with enough money are called Sunshine Cities.
Washington, D.C., ranked #1, and New York City ranked last at #75.
Learn more by joining our webinar on February 7th at 6:30 MT with this Zoom Link: https://udenver.zoom.us/s/82324310021
Don't hesitate to contact one of the following people for more information.
Sheila Weinberg, sweinberg@truthinaccounting.org (847)344-3824
Christine Kuglin, christine.kuglin@du.edu (303)909-9424
Judi Willard, jwillard@truthinaccounting.org (217)801-5821
