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NYS Comptroller

THOMAS P. DiNAPOLI

Research Publications

2015
  • Fiscal Indicator Close-Up Reports:
    • Cash/Liquidity 06/17/15 - "Low liquidity," a "poor cash position" or a "weak cash flow" all describe situations where cash on hand would not cover the amount of a government's short-term obligations. In general, local governments designated as "fiscally stressed" in OSC's Fiscal Stress Monitoring System – regardless of class – exhibited cash flow difficulty. Counties face unique cash flow challenges due to the nature of their revenue and expenditure streams, and a majority of counties showed evidence of a poor cash position in the last fiscal year.
    • Fixed Costs 06/17/15 - Local government spending goes largely toward fixed costs, such as debt service, salaries and employee benefits. When fixed costs begin to make up an exorbitant portion of a budget, financial flexibility is impaired. Thus high fixed costs are measured by OSC’s Fiscal Stress Monitoring System as an indicator of fiscal stress. Cities usually have high personal service and benefit costs because they typically are responsible for providing more labor intensive services (e.g., police and fire) than other classes of government, and villages are most likely to have high debt service costs.
    • Fund Balance 06/17/15 - Fund balances, often called "rainy day funds" or "budgetary reserves," are the accumulated result of operations over time (surpluses and deficits). The close relationship between low fund balance and fiscal stress makes fund balance an important measure in OSC's Fiscal Stress Monitoring System. Almost 93 percent of counties have fund balances that are less than the FSMS threshold, as do 69 percent of cities, 54 percent of villages and over 48 percent of towns.
    • Operating Deficits 06/17/15 - Operating deficits are the result of an imbalance between revenues and expenditures. Repeated annual operating deficits—particularly sizeable ones—are a clear sign that a government's budgets are structurally imbalanced. In the most recent fiscal year, OSC's Fiscal Stress Monitoring System showed that an increased occurrence of operating deficits was an important early warning indicator of government financial stress: 72 percent of local governments designated in some level of fiscal stress had operating deficits.
    • Short-Term Debt 06/17/15 - While there are some exceptions, a heavy or ongoing reliance on short-term debt tools indicates that a local government has cash flow issues that are not being resolved. The presence of short-term debt as an indicator of fiscal stress is measured in OSC's Fiscal Stress Monitoring System. Counties and school districts are by far the biggest issuers of short-term debt, typically using it to bridge financial gaps caused by poor timing of revenue receipts.
  • Three Years of the Fiscal Stress Monitoring System - Results for Municipalities with Fiscal Years Ending on December 31, 2014 09/23/15 - In September 2015, OSC released the third annual set of Fiscal Stress Monitoring System (FSMS) scores for all municipalities that have fiscal years that operate on a calendar year basis. This includes all 57 counties outside of New York City, all 932 towns in the State, 44 cities and 10 villages – a total of 1,043 municipalities. Since the FSMS now encompasses three years of data for these "calendar year" municipalities, it is possible to start to discern trends in the financial performance of these local governments. [read Persistent Non-Filing Municipalities - pdf]
  • Fiscal Stress Monitoring Summary Results: Common Themes for School Districts 01/29/15 - The districts experiencing fiscal stress are spread across the State. One indicator in particular—the operating deficit—saw substantial changes in the FSMS points assigned compared to the previous year: 19 percent received a higher FSMS score on this indicator, while 28 percent scored lower. Changes in scores for this indicator contributed to changes in districts’ overall levels of fiscal stress.