The “Financial State of the Cities 2025” report by Truth in Accounting provides a comprehensive analysis of the fiscal health of America’s 75 largest municipalities. Alarmingly, it reveals that 54 of these cities lack the necessary funds to meet their financial obligations.
Kansas City and St. Louis are notably highlighted for their fiscal challenges. Kansas City is ranked 57th, while St. Louis is positioned at 59th. Both cities have been assigned “D” grades, indicating significant financial distress. This distress is quantified through the “Taxpayer Burden” metric, representing the amount each taxpayer would need to contribute to settle all municipal debts. In Kansas City, this burden amounts to $8,800 per taxpayer, whereas in St. Louis, it escalates to $9,800.
A primary factor contributing to these burdens is the underfunded pension liabilities in both cities. Unfunded pensions place taxpayers and city services at risk, leading to increased debt and financial instability.
The implications of such financial distress are profound. Residents may face reduced public services, increased taxes, or both, as cities strive to balance their budgets. Moreover, fiscal instability can deter business investments, stymie economic growth, and erode public trust in local governance. This is in addition to both cities’ struggles providing public safety.
Addressing these challenges necessitates a multifaceted approach. Cities must prioritize fiscal responsibility, ensure transparent accounting practices, and engage in proactive financial planning. Fostering economic development can help alleviate fiscal pressure, but it must be real development, not the sort we have seen for decades that merely transfers tax dollars to corporate cronies.
There is an urgent need for comprehensive fiscal reforms in both of Missouri’s largest cities. Without prompt and effective action, residents will bear the brunt of past financial mismanagement for years to come.
