Worst Run Cities
20. Tucson, Ariz.
> Population: 525,798
> Credit rating: Aa2, negative outlook
> Violent crime per 1,000 people: 6.52 (47th highest)
> Unemployment rate: 9.2% (tied-49th highest)
Tucson’s housing market fared better than most of Arizona, which was hit particularly hard by the recession. For instance, while housing prices in Phoenix dropped by 44.2% between 2007 and 2011 and by 39.5% in Mesa, in Tucson they declined by just 24.8%. The median home value in 2011 was just $138,300, below other nearby cities such as Phoenix and Chandler. Tucson’s foreclosure rate of 2.62% is among the worst 20% of large cities. The city’s debt is rated by Moody’s at Aa2, with a negative outlook. One of the issues Moody’s notes with the city is uncertain sources of revenue. In order to improve on this, along with passing a budget of $1.3 billion in May, the city raised property taxes by an additional 10 cents to $1.26 per square foot, and also raised water rates by more than 8%.
19. Reno, Nev.
> Population: 227,509
> Credit rating: Aa3, negative outlook
> Violent crime per 1,000 people: 4.88 (31st lowest)
> Unemployment rate: 13.0% (15th highest)
Between 2007 and 2011, median home values in Reno declined more than 47% from $337,200 to just $178,200. But while Reno’s city government had to make drastic cuts at the height of the economic downturn, its finances are finally getting in order. The $295 million budget for 2012-2013, which was passed in May, was the first in five years that does not contain any layoffs, cuts in services or dips into the city’s financial reserves. According to The New York Times, Reno has had difficulty reinventing itself away from the casino industry it is dependant on, and remains a one-industry city. Meanwhile, the city’s gaming revenue continues to fall, dropping by 3.3% in November of 2012 from a year earlier.
18. Sacramento, Calif.
> Population: 472,169
> Credit rating: Aa2, under review for downgrade
> Violent crime per 1,000 people: 7.11 (38th highest)
> Unemployment rate: 14.1% (tied- 9th highest)
Home values in Sacramento fell 41.4% between 2007 and 2011, which is nearly four times more than the national rate. With the decline in home values came a decline in jobs. The city’s unemployment rate in 2011 was 14.1%, which was the ninth-highest of the largest cities. The city’s finances, however, may begin to improve. After city voters approved a half-percent sales tax increase in November, the City Council considered reversing budget cuts in areas such as the police department, fire department and park maintenance that have taken place in the last several years. There has been significant turnover in City Hall recently, with five of the eight seats changing in the last two years.
17. Chicago, Ill.
> Population: 2,707,123
> Credit rating: Aa3, negative outlook
> Violent crime per 1,000 people: n/a
> Unemployment rate: 11.3% (21st highest)
Chicago, the third-largest city in the U.S., suffers like most large cities from higher than average crime and poverty rates. This is likely exacerbated by low graduation rates from Chicago’s Public Schools, which, while improving, still stand at just over 60%. The city’s government received much attention in September when teachers from the district, which is under the control of Mayor Rahm Emanuel, went on strike over compensation and a teacher evaluation system. The two parties were finally able to compromise, but not until students missed a week and a half of school. In November, the City Council passed a $6.5 billion budget that included hundreds of job cuts through layoffs or attrition, reduced library hours, and the closing of half of the city’s mental health facilities. The city is still running a nearly $300 million deficit, although this is down significantly from prior years due to previous cuts.
16. St. Louis, Mo.
> Population: 318,069
> Credit rating: Aa3, stable outlook
> Violent crime per 1,000 people: 18.57 (2nd highest)
> Unemployment rate: 11.7% (19th highest)
The city of St. Louis struggles with high poverty and crime. Twenty-seven percent of residents lived in poverty in the last 12 months, with more than 13% of households earning less than $10,000 a year — both figures significantly higher than the national rates. St. Louis also ranked among the most violent crime-ridden cities in America. Residents in November voted to reinstate local police control, taking power away from a state board. Supporters argued this would increase police efficiency and accountability, ultimately leading to safer streets. Opponents argued that this measure could weaken the ability of a civilian review board to monitor officer conduct. City residents also voted to cut the number of aldermen from 28 to 14. Advocates of the measure argued this will make the board more efficient, while opponents claimed it will just add thousands of people to an already overtaxed aldermans’ constituency.
15. Santa Ana, Calif.
> Population: 329,405
> Credit rating: Baa1
> Violent crime per 1,000 people: 4.00 (21st lowest)
> Unemployment rate: 13.7% (tied-11th highest)
Santa Ana’s unemployment rate of 13.7% in 2011 was significantly higher than the 8.9% unemployment rate across the country. Less than 55% of Santa Ana’s residents aged 25 and over had a high school diploma, and under 10% of all residents had at least a bachelor’s degree, making Santa Ana the least educated among the 100 most populous cities. Santa Ana is one of the few cities to not have an investment grade credit rating on its bonds by Moody’s. Moody’s noted that while the city has had two years of surpluses in its budget, it has little in emergency reserves. The agency also points out that the high unemployment played a role in a weaker rating.
14. Toledo, Ohio
> Population: 286,033
> Credit rating: A2, stable outlook
> Violent crime per 1,000 people: 9.98 (23rd highest)
> Unemployment rate: 10.4% (tied- 33rd highest)
Toledo is a low-income city. More than 30% of the population lived below the poverty line in the past 12 months, the 10th-highest percentage of all cities. The median household income was $31,090 in 2011, the eighth-lowest among major U.S. cities. Home values in the Toledo area plummeted by nearly 20% between 2007 and 2011 to reach a median of under $82,000. Although Toledo’s credit rating of A2 from Moody’s is still considered investment grade, it is far from pristine. Moody’s noted that while its finances are improving, the city continues to suffer from high unemployment and a declining population.
13. Birmingham, Ala.
> Population: 211,458
> Credit rating: Aa2, no outlook
> Violent crime per 1,000 people: 14.83 (5th highest)
> Unemployment rate: 10.9% (25th highest)
Birmingham is the largest city in Jefferson County, which was responsible for the largest municipal bankruptcy in U.S. history when it filed for Chapter 9 protection in late 2011. Although the city of Birmingham keeps its finances independent of the county, city residents are affected by the county’s poor management nonetheless. According to The Wall Street Journal, the city, which is the county seat, has had difficulty convincing businesses to locate there. A 2012 study by the Tax Foundation showed the part of Birmingham located within Jefferson County had the highest sales tax rate of any major U.S. city at 10% – another factor which likely has had a negative impact on business growth in the area. This high sales tax rate is also especially troubling in a city with a 32% poverty rate — more than double the national rate of 15.9% — since sales taxes disproportionately impact the poor.
12. Riverside, Calif.
> Population: 310,654
> Credit rating: Baa1
> Violent crime per 1,000 people: 4.26 (24th lowest)
> Unemployment rate: 13.7% (11th highest)
Riverside is struggling to rebound from the economic downturn, which sent home values in the city plunging more than 46% from 2007 to 2011. Nearly 4% of homes were in foreclosure in 2011, while the unemployment rate that year was 13.7%. Both figures were among the highest in the country for large cities. Riverside’s bonds were downgraded by Moody’s last month from A1 to Baa1, making them below investment grade. Among the reasons that the agency gave for its decision were the city’s high unemployment and foreclosure rates. Some good news for city residents, Riverside’s violent crime rate is lower than nearly three quarters of major U.S. cities.
11. Las Vegas, Nev.
> Population: 589,340
> Credit rating: Aa2, stable outlook
> Violent crime per 1,000 people: 7.41 (36th highest)
> Unemployment rate: 14.2% (8th highest)
Las Vegas, along with the rest of the state of Nevada, was absolutely devastated by the housing crisis. Home values declined by more than 50% between 2007 and 2011, the fourth-largest decline among all large cities. A large majority of Las Vegas homeowners owe more than their homes are worth. The city had an unemployment rate of 14.2% in 2011, one of the highest rates in the country. The city government approved a relatively unchanged budget for 2013 compared to 2012, with no layoffs or pay cuts for employees. This is an improvement from previous years when it made severe cuts to city services. However, the city has major debt expenses to pay off, especially after spending $185 million on a new city hall and $13.5 million on a new parking garage.