Special Report

The Best and Worst Run Cities in America

Many qualities separate the best-run and worst-run cities. But perhaps the most important is access to jobs. The economies of the best-run cities fall into two categories. They either have a booming industry or are near other major urban areas that create employment opportunities. The worst-run cities simply do not have the same access to jobs. 24/7 Wall St.’s analysis of the best-run and worst-run cities demonstrates that encouraging businesses to prosper and create jobs is the most important function of local government.

Read the Best-Run Cities in America

Read the Worst-Run Cities in America

24/7 Wall St. has completed its first annual ranking of the best-run and worst-run cities in America. We reviewed the local economies, fiscal discipline and standard of living of the 100 largest cities by population to determine how well each is managed. Based on these data, 24/7 Wall St. ranked the 100 cities from the best to worst run. The best-run city is Virginia Beach, Va. The worst-run city is Miami, Fla.

Four of the 10 best-run cities are the economic centers of their regions. Madison, Wis., is one of the best-run cities on our list, and its businesses employ the most people in the area. Six of the best-run cities serve as residential communities for larger metropolitan areas that are the economic centers. Scottsdale, Ariz., is a large city in its own right, but is often referred to as a suburb of Phoenix.

Frequently, these so-called “edge cities” have also developed their own vibrant economies. Plano, Tex., is part of the Dallas-Fort Worth metropolitan area. However, the city has a booming tech community and large offices of major corporations such as HP and Dell.

Nine out of the 10 worst-run cities on this list rely on older industries that are shrinking. Hialeah, Fla., was an important textile hub in the 1960s through the 1980s. Cleveland, Ohio, was one of the nation’s leaders in steel production. Detroit, Mich., of course, manufactured cars. Since their booms, all of these cities have shed tens of thousands of jobs.

Many of the worst-run cities have been in bad shape for years. While residents who were able to moved away, those without resources remained. As a result, the cities’ expenses remained high while their tax bases shrunk. The populations of four of the worst-run cities decreased between 2000 and 2010. Detroit lost just under 240,000 residents. On the other hand, the populations of all the best-run cities increased.

While there is a strong relationship between high median income and high ranking, there is an even stronger relationship to poverty. While a majority of the best-run cities have more households making over $200,000 per year than the national average, none of the top 10 cities have high poverty rates. For example, Lincoln, Neb., has only the 33rd highest median income among the largest cities, but the 11th lowest percentage of households making less than $10,000 per year.

For the most part, the best-run cities manage their debt and resources well. The worst-run cities do not. Moody’s provided credit ratings and analysis for 16 of the 20 cities on our list. The two cities that are the best-run and that do not have credit ratings, Fremont and Irvine, Calif., do not have a need to finance government projects through debt. Their wealthy and large tax base would suggest that is the case. Hialeah, Fla., one of the worst-run cities according to our ranking, told 24/7 Wall St. that it did not issue city debt because it had other debt instruments to raise money for government projects. San Bernadino, Calif., the other worst-run city without a credit rating, did not return 24/7 Wall St.’s calls.

These are the best- and worst-run cities in America.

The Best-Run Cities in America

10. Plano, Tex.
> Violent crime per 1,000 people: 1.81 (7th lowest)
> Poverty rate: 7.9% (5th lowest)
> Adult population graduated from high school: 93.3% (4th highest)
> Credit rating: Aaa
> Population: 261,697

Plano, a wealthy suburb of Dallas, was founded in 1873. The city has one of the lowest violent crime rates in the country, partly because it can afford a sizable and educated police force. Plano is one of the few cities in the U.S. that require a four-year college degree of its police officers. Plano’s population is the third wealthiest of the cities we examined, with a median household income of nearly $80,000 a year. Just 7.9% of the area’s residents live below the poverty line, and just 1.3% of households makes less than $10,000 per year, the lowest rate among all major U.S. cities. Moody’s has assigned a perfect Aaa rating to Plano’s general obligation credit, citing “an affluent and large tax base” and “strong financial management.”

Also Read: The Most Popular American Companies in China

9. Chandler, Ariz.
> Violent crime per 1,000 people: 2.86 (14th lowest)
> Poverty rate: 8.2% (6th lowest)
> Adult population graduated from high school: 91.5% (13th highest)
> Credit rating: Aaa (stable outlook)
> Population: 236,775

Chandler is one of the newest large cities in the U.S. The city was incorporated in 1951, but the population did not truly expand until very recently. In 1980, Chandler, which is located within the greater Phoenix metropolitan area, had a population of 30,000. Now, it has a population of 247,000. There are countless examples of cities that experienced this level of growth, but few, especially in the Southwest, that maintained a healthy economy through the recession. And despite home values dropping precipitously in the city, like the rest of the Phoenix region, Chandler managed to maintain a healthy economy. In 2010, the city had the ninth-lowest unemployment rate among the largest cities, and the sixth-lowest poverty rate. Chandler has been assigned a perfect Aaa stable rating by Moody’s. The credit rating agency justified the rating: “The stable credit outlook reflects Moody’s expectation that management will continue to maintain favorable financial operations and strong reserve levels despite ongoing economic weakness.”

8. Scottsdale, Ariz.
> Violent crime per 1,000 people: 1.53 (6th lowest)
> Poverty rate: 7.9% (4th lowest)
> Adult population graduated from high school: 95.9% (the highest)
> Credit rating: Aaa (stable outlook)
> Population: 217,977

Like Chandler, Scottsdale is a prosperous suburb of Phoenix. It has the seventh-highest median income in the country, the highest percentage of high school graduates, and is among the top 10 for unemployment and health insurance coverage. However, because of its close proximity to Phoenix, home values dropped substantially during the recession. Nevertheless, the city has managed to maintain healthy employment and low poverty, as well as a stable Aaa rating — the best a city can receive. According to Mayor W. J. Lane, “Scottsdale has weathered the recession with our Aaa bond ratings intact because we cut where we need to cut and we invest where we need to invest.”

Also Read: America’s Nine Newest Cities

7. Seattle, Wash.
> Violent crime per 1,000 people: 5.67 (43rd lowest)
> Poverty rate: 14.7% (14th lowest)
> Adult population graduated from high school: 92.8% (7th highest)
> Credit rating: Aaa
> Population: 610,710

Among the best-run cities, Seattle is easily the largest, with over 180,000 people more than the next largest city on our list. A large population often hinders a city’s ability to manage resources well because it can create a higher cost of governance and more complicated logistics. Nevertheless, Seattle is one of the healthiest large cities in the U.S., with a poverty rate smaller than other cities on our list with populations a third of the size. In the 1980 and 1990s, the city became a mecca for emerging Internet, tech and green-tech companies. These industries are still going strong, continuing to attract a healthy base of professionals to the area, as evidenced by its high percentage of adults with a high school diploma. Seattle also has a high rate of health insurance coverage.

6. Chesapeake, Va.
> Violent crime per 1,000 people: 3.84 (19th lowest)
> Poverty rate: 7% (2nd lowest)
> Adult population graduated from high school: 90.8% (14th highest)
> Credit rating: Aa1
> Population: 222,986

The city of Chesapeake was founded in 1963, although the area itself has had people living there since the late 17th century. Chesapeake is located on the southern edge of of the City of Norfolk. It is also within striking distance of the city of Virginia Beach, which itself is among the best-run cities. These two adjacent cities provide sources of employment for Chesapeake residents. With few urban areas, Chesapeake has relatively low crime and unemployment, as well as the second-lowest poverty rate in the U.S. However, the city has a credit rating of Aa1, rather than Aaa, and is not in the top 20% for health insurance coverage.

5. Lincoln, Neb.
> Violent crime per 1,000 people: 4.84 (32nd lowest)
> Poverty rate: 17.3% (28th lowest)
> Adult population graduated from high school: 92.9% (6th highest)
> Credit rating: Aaa (stable outlook)
> Population: 259,041

Lincoln, Neb., is one of only two state capitals to make our best-run cities list. It also has a much lower median household income compared to the very high incomes of most of the best-run cities on our list. Lincoln’s income is just $47,526, ranking only 35th among the 100 largest cities in the country. Despite the less affluent tax base, however, Lincoln’s economy is healthy. The city had an average unemployment rate of just 3.73% over the past 12 months, the lowest among the 100 cities considered, as well as the fourth-lowest vacancy rate. Mayor Chris Beutler explained to 24/7 Wall St., “Over the past five years, we’ve incorporated citizen input into a multifaceted outcome-based budget process where we ask residents what their priorities are and what they want their city to be. It’s been very well received and has helped build a culture of citizen ownership and involvement that has guided our decision making and solidified citizen support.” Moody’s has awarded an Aaa rating to the city’s debt, explaining: “The city’s financial position will remain sound given management’s conservative budgeting practices, ample revenue-raising flexibility and alternate liquidity provided in the Special Revenue fund.”

Also Read: Why America’s Financial Future is Far Better Than Europe’s

4. Fremont, Calif.
> Violent crime per 1,000 people: 2.37 (11th lowest)
> Poverty rate: 6.6% (the lowest)
> Adult population graduated from high school: 90.2% (15th highest)
> Credit rating: not rated
> Population: 214,613

For a large city to have weathered the worst of the recession is impressive. To do it in the particularly hard-hit state of California is especially notable. Like most of the state, home values dropped nearly 15% between 2007 and 2010. Nevertheless, the city has a vacancy rate of just 5.6%, good enough to make the top five among large cities. Fremont also has a poverty rate of just 6.6%, the lowest in the country, and a violent crime rate of just 2.37 per 1,000 people.

3. Madison, Wis.
> Violent crime per 1,000 people: 3.92 (21st lowest)
> Poverty rate: 18.7% (40th lowest)
> Adult population graduated from high school: 95.1% (3rd highest)
> Credit rating: Aaa (stable outlook)
> Population: 233,777

Madison, the other capital city on our list, was incorporated in the mid 1800s, and exists today as one of the most well-run cities in the Midwest. Madison is not a particularly wealthy city, with a median household income of just over $50,000. Nevertheless, the capital has a perfect Aaa (stable) credit rating, as well as extremely low unemployment and home vacancy rates. According to Madison city administrative analyst Tim Fruit, “Over the past few years, we have really made a significant effort toward more carefully planning our six-year capital improvement program. In the past, the out years were not well scrutinized. Now, we try to analyze and balance the out years much more carefully.”

Also Read: The Worst Product Flops of 2011

2. Irvine, Calif.
> Violent crime per 1,000 people: 0.55 (5th lowest)
> Poverty rate: 12.3% (9th lowest)
> Adult population graduated from high school: 95.7% (2nd highest)
> Credit rating: not rated
> Population: 212,982

Irvine has a violent crime rate of just 0.55 per 1,000 people, the fifth lowest among the major cities on our list. The city is also among the best 10 for home vacancy, unemployment, median income and high school graduation rates. In 2008, CNN Money rated it the fourth-best place to live in the U.S. According to Craig Reem, director of public affairs and communications, “We are seeing a gradual improvement in our local economy that allows us to move from recession ready, to recovery ready. The City Council plans conservatively: This past fiscal year (2010-2011), we outperformed our budget expectations by nearly $14 million.”

1. Virginia Beach, Va.
> Violent crime per 1,000 people: 1.88 (8th lowest)
> Poverty rate: 7.5% (3rd lowest)
> Adult population graduated from high school: 93.1% (5th highest)
> Credit rating: Aaa (negative outlook)
> Population: 439,172

Virginia Beach is, by our measurement, the best-run city in the U.S. Located on the eastern shore of Virginia, the city is one of the most prosperous in the country. Out of the 100 largest cities, it has among the 10 lowest violent crime, unemployment, and poverty rates, as well as among the 10 best for median income, high school graduation and health insurance coverage. Moody’s listed Virginia Beach’s three main strengths as a “large and diverse tax base stabilized by the presence of military bases,” the city’s “strong and carefully managed financial position,” and “comprehensive financial policies and conservative budgeting approach.” The city’s credit rating is a perfect Aaa.

The Worst-Run Cities in America

10. Hialeah, Fla.
> Violent crime per 1,000 people: 4.36 (26th lowest)
> Poverty rate: 22.1% (35th highest)
> Adult population graduated from high school: 68.6% (5th lowest)
> Credit rating: not rated
> Population: 225,461

Hialeah is the sixth-largest city in the state, and yet it receives little press attention, largely because it is overshadowed by the neighboring city of Miami. In many ways, Hialeah is an improvement on its larger neighbor, posting the 26th lowest violent crime rate in the country, as well as the third-lowest vacant homes rate, at just 5%. However, Hialeah also has a 12-month unemployment rate of more than 15% — higher than Miami and all but a few of America’s largest cities. The city, which has grown very quickly over the past several decades, has one of the lowest percentages of adults with health insurance, at 28.6%.

Also Read: The American States That Added (and Lost) the Most Jobs

9. North Las Vegas, Nev.
> Violent crime per 1,000 people: 8.93 (28th highest)
> Poverty rate: 18.0% (35th lowest)
> Adult population graduated from high school: 76.8% (15th lowest)
> Credit rating: A2 (negative outlook)
> Population: 217,304

The housing market of North Las Vegas plunged 50.9% from 2007 to 2010. In 2010, one in every five homes in the city was foreclosed upon, according to RealtyTrac. On top of it all, the North Las Vegas Housing Authority misspent public money for years meant to help needy residents. It appears that the soft housing market will continue to hurt city coffers. One of its major revenue sources — property taxes — is expected to fall by over a fifth in 2011 in the county. To reduce spending, the city cut or froze more than 800 positions in recent years. The city has a credit rating of A2 from Moody’s, which the agency attributes to its “continued economic weakness and persistent financial challenges,” as well as “the city’s structurally imbalanced operations and reliance on financial reserves” used to support government operations.

8. Fresno, Calif.
> Violent crime per 1,000 people: 6.26 (48th highest)
> Poverty rate: 30.2% (9th highest)
> Adult population graduated from high school: 74.6% (11th lowest)
> Credit rating: A3 (negative outlook)
> Population: 496,147

Fresno, which was incorporated in 1885, is California’s largest inland city. Like much of the state, the city’s home values declined by more than 30% between 2007 and 2010. However, the vacancy rate in the city, at 9.8%, is better than average. Fresno’s 12-month average unemployment rate was the fifth-highest among the largest cities in the U.S. Also, more than 30% of the population lives below the poverty line. In October, Moody’s downgraded the city’s long-term debt rating to A2, citing an increasing budget gap and weak financial reserves.

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7. St. Louis, Mo.
> Violent crime per 1,000 people: 17.47 (2nd highest)
> Poverty rate: 27.8% (13th highest)
> Adult population graduated from high school: 81.5% (36th lowest)
> Credit rating: Aa3 (stable outlook)
> Population: 319,156

St. Louis has had a hard time controlling violent crime. With 17.47 incidents per 1,000 residents in 2010, the city has the second highest rate of violent crime in the country. This is due in part to the city’s high poverty rate of 27.8% and its median income of $32,688, which is the 10th lowest out of the 100 largest cities. Additionally, nearly 20% of housing units in the city are vacant. All of these measures influence government revenues. Despite this, St. Louis has managed its finances fairly well. While Moody’s credit score is Aa3, the credit agency also reports that the city faces a continued weakening of resident income levels, high unemployment rates and a decreasing population.

6. Stockton, Calif.
> Violent crime per 1,000 people: 13.81 (6th highest)
> Poverty rate: 23.0% (27th highest)
> Adult population graduated from high school: 75% (12th lowest)
> Credit rating: Baa1 (negative outlook)
> Population: 292,747

Stockton is part of the inland area that also contains Fresno. Stockton was one of the hardest-hit by the burst housing bubble. In 2007, median home value in the city was $364,700. By 2010, that number declined more than 50% to $171,500. This massive drop — the second-largest decline among all major cities — has led to large-scale foreclosures and an increasingly dire economic situation. Stockton has the sixth-highest violent crime rate in the country among major U.S. cities, as well as the second-highest average unemployment rate, at more than 20%. The city currently has a large debt and a weak economy.

5. Cleveland, Ohio
> Violent crime per 1,000 people: 12.97 (8th highest)
> Poverty rate: 34.0% (3rd highest)
> Adult population graduated from high school: 77.7% (19th lowest)
> Credit rating: A1 (stable outlook)
> Population: 396,240

Cleveland has grown exceptionally poor since its days as a major manufacturing center. Census data from 2010 show that one out of every three Cleveland residents lives in poverty, placing the city among the poorest large American cities. Cleveland also has the second-lowest median household income, at just $25,977, as well as a particularly high rate of violent crime. In addition, Cleveland is the county seat of Cuyahoga County, which is in the midst of a tremendous corruption scandal, centered around County Commissioner Jimmy Dimora.

Also Read: Best and Worst Run States in America

4. San Bernardino, Calif.
> Violent crime per 1,000 people: 8.15 (31st highest)
> Poverty rate: 34.6% (2nd highest)
> Adult population graduated from high school: 64.1% (2nd lowest)
> Credit rating: not rated
> Population: 210,670

San Bernardino is the third city from California to make our top worst-run cities list. Its economy has arguably been hit harder by the subprime mortgage crisis than any other major U.S. city. Between 2007 and 2010, median home value dropped 55%, from $327,000 to just $147,200. Along with the massive loss in home values, unemployment rates have skyrocketed to the third-highest in the country among the largest cities. The city also has a poverty rate of nearly 35%. Just 64.1% of adults have a high school diploma.

3. Newark, N.J.
> Violent crime per 1,000 people: 10.29 (21st highest)
> Poverty rate: 30.2% (10th highest)
> Adult population graduated from high school: 69.2% (6th lowest)
> Credit rating: A3 (negative outlook)
> Population: 277,232

Newark has a very high rate of poverty, reaching 30.2% in 2010. Its median household income is $32,043 — the ninth lowest among the 100 largest cities. Less than 70% of the adult population has a high school diploma or more — the sixth lowest rate. Meanwhile, Newark’s violent crime rate has been increasing. In late November 2010, the city laid off nearly 15% of its police force. By May 2011, the annual murder rate had increased a stunning 65%. Robberies, burglaries and thefts increased as well.

2. Detroit, Mich.
> Violent crime per 1,000 people: 18.87 (the highest)
> Poverty rate: 37.6% (the highest)
> Adult population graduated from high school: 77.4% (18th lowest)
> Credit rating: Ba3 (on review)
> Population: 711,910

Despite being more notorious for its troubles than any other major U.S. city, Detroit managed to avoid the title of worst-run city in the country. The city has been in a tough spot for decades, but continued problems with corruption and poor management have not helped matters. Detroit already sports the worst credit rating awarded by Moody’s and is the only one of the 100 largest cities in the U.S. to have a rating below investment grade. Worse still, the rating agency is currently reviewing the Ba3 rating — which already had a negative outlook — after the state of Michigan announced it was evaluating whether the city’s troubles constituted an economic crisis. Of the 100 largest cities, Detroit has the highest home vacancy rate, the highest unemployment rate, the highest poverty rate, the worst violent crime rate and the lowest median household income.

1. Miami, Fla.
> Violent crime per 1,000 people: 11.08 (13th highest)
> Poverty rate: 32.4% (5th highest)
> Adult population graduated from high school: 68.2% (4th lowest)
> Credit rating: A2 (stable outlook)
> Population: 400,892

According to a 2011 UBS study, Miami is the richest city in the country and the fourth richest city in the world by domestic purchasing power. However, a 2011 study by the Census Bureau found the Miami metropolitan area also had the second-highest income inequality rate in the nation — probably due to the incredibly high percentage of households living below the poverty line. Despite the city’s wealth, Miami’s median household income of $27,291 is the third smallest among the 100 biggest cities. Its poverty rate of 32.4% is the fifth highest. The city faces a handful of other problems. Only 68.2% of adults have a high school diploma or more — the fourth lowest rate. Also, 22.5% of housing units are vacant, which is the fifth highest percentage. A 2011 Brookings Institute report put Miami among the 20 weakest-performing metropolitan statistical areas in the country with regards to recovering from the recession, due in large part to the crash of its housing market.


24/7 Wall St. considered data from a number of sources. The Bureau of Labor Statistics provided unemployment data. The average rate for the most recent 12 months was used for our ranking. Credit ratings were provided by Moody’s Investors Services. The FBI’s Uniform Crime Report provided violent crime rates by city. We relied on the U.S. Census Bureau’s American Community Survey for median household income, the percentage of the population below the poverty line, high school completion for those 25 and older, percentage of the population without health insurance and the change in occupied home values from 2007 to 2010. Once we reviewed the sources and compiled the final metrics, we ranked each city based on its performance in all the categories. A few cities did not have credit ratings or violent crime rates; these were not rewarded or penalized for the missing data.

Michael Sauter, Charles Stockdale, Ashley Allen

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