Los Angeles Receives 'C' Grade for Fiscal Health

According to Truth in Accounting's Financial State of the Cities 2026 report, Los Angeles did not have enough money at the end of fiscal year 2024 to pay all its bills. The report shows a $1.8 billion shortfall, which equals a Taxpayer Burden™ of about $1,300 per taxpayer.

The analysis notes that the city has taken steps to prefund pensions and retiree health benefits, including contributions equal to actuarially determined amounts. However, long-term obligations still exceed available assets. Los Angeles earned a grade of “C,” indicating the city is close to meeting its balanced budget requirements but is still in debt.

This report delivers a straightforward review of the five largest U.S. cities' assets and debts, including often-overlooked retirement liabilities, to give taxpayers a clearer view of fiscal realities. To promote accountability, budgets must incorporate contributions to retirement systems, ensuring officials fully recognize and fund these commitments.