Here's a look at the problems this poses for city finances.
- City upside down: How Houston lost control of its wallet.
This article contains a slide show which makes the point that city revenues are growing at a slower rate than expenditures, and that pension liabilities are driving this disparity. I thought this paragraph was worth highlighting since it discusses the unique role cities play in the federal governing system:
“Cities create the platform for the stage upon which all business is done,” said Jim Noteware, a Houston-based real estate developer and former director of Houston’s Department of Housing and Community Development. “Cities create the roads, sewers and waterlines, but they also create human infrastructure, and all of those in Houston — like across many cities in the country — are breaking down.
Cities also employ more people than other levels of government, so issues associated with pay and benefits loom larger than they do elsewhere. For more on Houston's pension issues - which are common to many other cities, especially large ones - click on the following report: Swamped: How Pension DebtIs Sinking the Bayou City.
I'm considering devoting an entire class soon to evaluating the report.
See also: Promises Made, Promises Broken 2014: Unfunded Liabilities Hit $4.7 Trillion.
