A recent study by Truth Accounting ranked Plano, Texas third out of 75 for fiscal health. Plano’s financial condition improved with a taxpayer surplus of $5,100, earning it a “B” grade.
In 2022, Plano had a total of $675.5 million at its disposal to cover expenses amounting to $239.2 million. This resulted in a surplus of $436.4 million, translating to approximately $5,100 per taxpayer.
The study revealed that Plano continued utilizing federal COVID-19 relief funds while experiencing a surge in tax revenue as the U.S. economy reopened. Unlike many other cities, Plano's pension system recorded unrealized investment gains during a period of market prosperity.
However, the surplus for taxpayers might be a transient advantage due to ongoing market instability, fluctuating investment values, diminishing COVID relief funds and a stabilizing economy that could dampen tax revenues.
In recent years, the investment market witnessed significant fluctuations, showcasing the potential risks for taxpayers when their city provides defined pension benefits to its employees. But unlike many other cities, Plano's pension and retiree health care plans were adequately funded.
Debt among all 75 cities included in the study was $288 billion at the end of the 2022 fiscal year. According to the study, 53 cities were unable to pay their bills. This indicates that to assert that their budgets were balanced, as mandated by law in the 75 cities, elected officials omitted the true expenses of governance from their budget calculations, shifting the burden onto future taxpayers.
Collectively, these 75 cities possessed assets worth $307.4 billion to cover their obligations, while their total debt, including unfunded retirement benefit commitments, reached $595.3 billion. Specifically, pension liabilities amounted to $175.9 billion, and other post-employment benefits (OPEB), primarily retiree health care, totaled approximately $135.2 billion.
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