bike path

We all give governments a hard time.  And we all think we could run cities better than they can.  But that’s not always the case.  Politicians have to represent the residents they serve, but they also have to balance the public’s interest with the city’s limited resources.  Which means, not everyone’s needs can be met.  Things come up.  Budgets get cut.  Emergencies happen.   But how do we measure the effectiveness of local leadership?  One way to do this is by determining a city’s operating efficiency.  Basically, we can determine how well city officials manage operating budgets by comparing the quality of services residents receive against the city’s total budget.

Wallet Hub decided to figure this out.  Which city do you think ranks number 1?  Well, it’s maybe not the one you’re thinking. More specifically, it’s not the one that I would have thought.  But the more I think about it, the more it makes sense.  The top-ranked city from an efficiency perspective is Huntington Beach, California.  Huntington Beach is a fairly small sized city.  And that might be the key to this.  Before I talk about my small sized city theory, let’s talk about how they came to these conclusions.


Financial Stability is ranked on Moody’s City Credit Rating, and the Long-Term Outstanding Debt per Capita.

Education is ranked on the GreatSchools Score and the High School Graduation Rate.

Health is determined based on a few things: Infant Mortality Rate; Average Life Expectancy; Hospital Beds per Capita; and the Quality of Public Hospital System.

Safety is determined based on the amount of violent crime in the city, what the property crime rates are, and how many fatalities there are per capita.

The Economy is determined based on a ton of criteria.  The most important things in this category include the unemployment rate, median household income, growth in the number of businesses, and change in housing prices.

traffic congestion

Lastly, we need to talk Infrastructure as that is the majority of a city’s assets.  This category is determined based on how congested the traffic is, how walkable your community is, and what kind of transit and recreation services you have available.

Getting back to Huntington Beach for a moment.  It ranked well in all categories except Infrastructure and Financial Stability.  You’re probably thinking – but didn’t you just say that those were important?  Of course, they are, so here is my theory.  In these smaller, or let’s call them mid-size cities, we rely less on things like transit.  While I’m not saying that this applies to Huntington Beach specifically, but hear me out.  There are certain communities where everyone drives.  That’s just the way it is.  Perhaps they do that because transit is bad, but maybe transit is bad because no one uses it.



What other cities made the list?

  • Nampa, ID
  • Provo, UT
  • Boise, ID
  • Missoula, MT
  • Lexington-Fayette, KY

If I continue on with this mid-size city analysis, all of the cities in this list would fall into that category.  It would appear that large cities don’t do well as well as mid-sized cities, from a budgeting perspective.  Why might this be?  Well, it’s possible that the mid-size cities don’t need to offer as many services as larger cities.  This might get into a “class” discussion, but I think it’s important to understand this.  In larger cities, there is almost always a clear class distinction.  Think New York City, for example.  Typically in larger cities, the wealthier people tend to pay more taxes (I’m generalizing here).  Their tax dollars are often spent on things like transit.  Who takes transit?  Not the incredibly wealthy, that’s for sure.  So, if we look at a mid-size city, there’s a good chance that this kind of dichotomy doesn’t exist.

More specifically, in larger cities, there tend to be a lot of people who need additional support – from a social assistance perspective.  Perhaps the city runs homeless shelters or different kinds of programs to help people find and retain employment.  None of these are inherently bad, but when it comes to your budgets, you’re spending more money on a variety of services.  Whereas in these mid-size cities, the governments likely have fewer of these kinds of needs.  Their spending would go towards infrastructure – including roads, traffic, recreation programming etc.  Now you’re probably thinking but larger cities would have more money.  That’s not always the case because not everyone who lives in a city is paying taxes.

The division of wealth seems to be more evenly distributed when we are talking about mid-sized cities.  Meaning, there aren’t huge gaps in wages or housing costs.  These mid-size cities seem to be able to meet the needs of their citizens while balancing the needs of the budgetary process.  That’s proven.  Otherwise, they wouldn’t have made the top five.  If you’re interested in drawing some of your own conclusions, head over to the WalletHub and have a look at their raw data.  It’s incredibly interesting if you ask me.

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