The MuniScore Methodology
A transparent, percentile-based financial health rating for U.S. municipalities. Four factors. Nine metrics. One score.
Score composition
Anatomy of a MuniScore
The MuniScore is the weighted average of four factor scores. Each factor captures a different dimension of financial health, from the local economy to long-term debt obligations.
The weights reflect each factor's reliability: reserves (40%) are the most stable and universally reported indicator; a single-year operating margin (10%) can swing on one-time events.
The framework
4 Factors, 9 Metrics
Each factor measures a distinct dimension of financial health. The weight distribution reflects that fund balance reserves are the most reliable indicator, while a single-year operating margin can swing on one-time items.
Economic health of the community. A strong tax base and employed population support revenue and reduce social service demand.
- Median Household IncomeHigher ▲
- Unemployment RateLower ▼
- Poverty RateLower ▼
- Bachelor's Degree+Higher ▲
Is the municipality living within its means? Lowest weight because single-year results can swing on one-time items like asset sales or grant timing.
- Operating MarginHigher ▲
The financial cushion. Highest weight because fund balance is the most stable, universally reported indicator. GFOA recommends a minimum ~16.7% of expenditure.
- Unreserved FB / ExpenditureHigher ▲
- Total FB / ExpenditureHigher ▲
Long-term commitments relative to revenue capacity. Uses TGF revenue as denominator, following S&P, Moody's, and GFOA methodology.
- Debt BurdenLower ▼
- Pension & OPEB BurdenLower ▼
Scoring engine
From Raw Data to Score
Three steps transform financial data into a MuniScore.
Score Each Metric
Compare each raw value against the national distribution of peers from the same fiscal year and sector. Map to a 0–100 score using percentile breakpoints with linear interpolation.
Average Into Factors
Each factor score is the simple average of its available metric scores. If a metric can’t be computed, it’s excluded from the average — not counted as zero.
Weight Into MuniScore
The overall MuniScore is the weighted average of the four factor scores (25/10/40/25). If a factor is missing, its weight redistributes to the remaining financial factors.
Percentile-to-Score Mapping
Per-Year Distributions
A city running a deficit during COVID-era 2020 is compared against other 2020 cities, not against a boom year.
Per-Sector Distributions
School districts typically have lower reserves but higher pension burdens than cities. Per-sector scoring ensures apples-to-apples comparisons.
| Metric | City P50 | County P50 | School P50 |
|---|---|---|---|
| Operating Margin | 5.4% | 7.2% | 3.4% |
| Total FB / Expenditure | 56.7% | 61.0% | 31.9% |
| Debt / TGF Revenue | 30.9% | 19.4% | 51.0% |
| NPL+OPEB / Revenue | 34.0% | 20.8% | 57.4% |
Fair comparisons
Scored Against Real Peers
Every score is computed against municipalities of the same type and same fiscal year — not a one-size-fits-all benchmark.
Without sector segmentation, a school district at the median for its peers would score below 50 against the all-sector distribution. Per-sector scoring prevents this systematic bias.
Data completeness
Confidence Badges & Missing Data
Not every municipality has complete data for all 9 metrics. MuniScore handles this through dynamic weight redistribution: when a factor can't be scored, its weight is proportionally redistributed among the remaining financial factors.
A MuniScore requires Economy plus at least 2 financial factors. About 76% of municipalities (11,000+) meet this threshold. ~75% of scored municipalities receive High confidence.
Single-ACFR Rule
All financial metrics must come from the same fiscal year. We never combine a 2024 balance sheet with a 2018 debt schedule.
BS+IS Required
Both balance sheet and income statement must be present to compute financial factors. About 70% of municipalities have both.
Fund Consistency
Within each factor, all metrics use the same fund — General Fund preferred, Total Governmental Funds as fallback. Never mixed.
Weight Redistribution
Missing financial factor weights redistribute proportionally among remaining financial factors, never to Economy. If both Budget and Reserves are missing, score is unavailable.
Comprehensive Annual Financial Reports
Audited financial statements filed with the Federal Audit Clearinghouse. Digitized and standardized for FY2016–2024.
Census American Community Survey
Economic data from the Census Bureau's 5-year ACS at place, MSA, and state levels. Automatic 3-tier fallback.
Transparency
Data Sources
MuniScore draws on two primary public data sources. All underlying data is audited or produced by federal agencies — no proprietary or estimated inputs.
Financial data comes from CAFRs filed with the Federal Audit Clearinghouse. Economic data comes from the U.S. Census Bureau's American Community Survey.
Philosophy
Design Principles
Relative, Not Absolute
A score of 50 always means “at the median of peers.” No arbitrary fixed thresholds. More robust to shifts in the overall fiscal environment.
Fully Transparent
Every metric, weight, and data source is documented. Users see which metrics were computed and which were unavailable. No black-box adjustments.
No Per Capita Metrics
Population data is unreliable for many entity types. Financial metrics use revenue or expenditure as denominators, following major rating agencies.
Single-Year Snapshots
No growth or trend metrics — many municipalities have non-consecutive fiscal years, making year-over-year calculations unreliable.
Graceful Degradation
Missing data handled through weight redistribution, not zero-filling. Confidence badges communicate data completeness honestly.
Industry-Informed
Inspired by S&P, Moody’s, GFOA, and the Lincoln Institute — adapted for digitized CAFR data at scale.
See It in Action
Explore Municipal Financial Data with Ease.
Browse MuniScores for 14,857 municipalities. Compare financial health across cities, counties, and school districts.