It’s not often that Fayetteville is discussed in the same context with New York and Chicago. The Big Apple and the Windy City rank at the bottom of a new analysis of municipal fiscal strength, while Fayetteville is near the top. The Fiscal Times report of the financial health of 116 U.S. cities with populations over 200,000 was based primarily on data from 2015 financial reports issued by the cities themselves. The Fiscal Times is a digital news analysis and opinion publication based in New York City and Washington, D.C. It says it focuses on how fiscal policy affects business and consumers and how business and consumer behavior influences government fiscal policy.
Chicago’s has a large amount of outstanding debt and underfunded pension plans. New York City also carries a very heavy debt burden. The city’s comptroller reports that new York’s per capita debt greatly exceeds that of all other large U.S. cities, and is even 50 percent higher than that of Chicago. Six of the top 10 cities were in California, led by Irvine which scored a perfect 100. The Fiscal Times gave Fayetteville a score of 89, ranking the city 8th best in the nation. “It’s because of our strong fiscal health, we are able to look at future economic development projects like the downtown stadium,” said Mayor Nat Robertson. “To maintain our solid fiscal policy, we not only keep an eye on what we spend, we spend it like it was our own money,” he added.
Five other North Carolina cities had scores of 70 or above. Durham came in as 13th. Greensboro was 21st. Charlotte and Raleigh were 56th and 57th respectively, and Winston Salem ranked 64th. The online news service said any score higher than 70 could reasonably be interpreted as a level of fiscal health sufficient to justify a AAA credit rating, the highest possible. “We are very pleased to be recognized nationally, and also with the highest ranking in the state,” said Cheryl Spivey, the city’s Chief Financial Officer. This “is an indicator of how well-managed our funds are,” she added.
The City of Fayetteville has been recognized consistently for its management of financial affairs. It received the Distinguished Budget Presentation Award for fiscal year 2016 and Certificates of Excellence in Financial Reporting for Comprehensive Annual Financial Reports for fiscal years 2006 through 2015. State and local governments that receive over $750,000 in federal funds are required to file audited financial statements no later than nine months after their fiscal year end. Federal government financial accounting procedures also require cities to report all long-term obligations.
The Fiscal Times weighted scoring system is based on a 100-point scale, using five factors: Here are the details of Fayetteville’s fiscal health:
General Fund Balance as a Percentage of General Fund Expenditures 47.42 percent.
Long Term Obligations as a Percentage of Total Revenues 71.61 percent
Actuarially Required Pension Contributions as a Percentage of Total Revenues 2.16 percent
Change in Unemployment Rate 0.20 percent
Change in Home Prices -2.23 percent
Fiscal Health Score 89
Implied Bond Ratin gAAA
The analysis was authored by Marc Joffe, Director of Policy Research for the California Policy Center. He has written for the Mercatus Center at George Mason University, the Reason Foundation and the Haas Institute at UC Berkeley. Previously, he was a senior director at Moody’s Analytics.