November 8, 2013
This report uses nine indicators of financial condition to measure the relative financial performance of Chicago and 12 other major U.S. cities from FY2007 to FY2011. In addition to Chicago, the other cities analyzed were Baltimore, Boston, Columbus, Detroit, Houston, Kansas City (MO), Los Angeles, New York, Philadelphia, Phoenix, Pittsburgh and Seattle.
Of the cities analyzed, only Boston and Detroit consistently performed worse than Chicago by these metrics during the five-year period that encompasses the Great Recession and slow recovery. Chicago’s relative financial performance during this period was defined by many of the same challenges it faces today, including a structural deficit and high debt levels. A majority of the cities experienced deteriorating financial condition during the five-year period, likely due to the Great Recession and its aftermath. However, many other cities were somewhat better equipped than Chicago to weather the 2008 financial downturn and resulting economic challenges.
The indicators in this report reflect four dimensions of governmental solvency: cash solvency, budgetary solvency, long-run solvency and service-level solvency. The press release for this report includes a brief summary of Chicago’s relative performance in these four areas.