Local governments’ total outstanding debt stood at $1.8 trillion in 2013, the most recent year for which Census Bureau data are available. Expressed as a share of national GDP (11 percent), this sum is down slightly from its 2009–11 peak but still higher than at any other time going back at least 35 years. Cities’ retirement-benefits burden has been worsening rapidly. In a study published in January 2015, Stanford University’s Joshua Rauh found that ten large U.S. cities’ pension liabilities had grown by 40 percent since the end of the Great Recession—from $277 billion to $359 billion—despite 75 percent growth in equity values from 2009 to 2013 and a wave of pension-reform legislation. (See "Scary Pension Math.") These elevated pension and bonded-debt figures suggest that the threat of municipal insolvency is greater than at any time since the Great Depression.
Compounding the problem of many cities’ extensive liabilities are relatively weak revenue bases. Nearly eight years after the last recession began, city revenues nationwide still have not returned to 2006 levels, according to a recent National League of Cities study.
Source: Manhattan Institute City Journal
Monday, March 21, 2016
Local Government Debt As Share Of US GDP: 1977 To 2012 Graph
Posted By Milton Recht
From Manhattan Institute, City Journal, "Caesarism for Cities: To prevent more Detroits, states must rein in local officials’ fiscal recklessness." by Stephen Eide, Winter 2016:
Posted 3/21/2016 11:24:00 AM