December 28, 2012
DiNapoli: Local Governments Continue to Face Significant Fiscal Challenges
Many local governments have nearly exhausted their resources in an effort to avoid severe fiscal stress, according to an annual report released today by State Comptroller Thomas P. DiNapoli.
“For the past five years, the financial trends in our municipalities and school districts have become of heightened concern,” said DiNapoli. “Years of decreasing, stagnant or slow economic growth have led local governments to cut vital services and tap their rainy day funds to balance budgets, a practice that is not sustainable in the long term.”
DiNapoli’s report noted that the growing disparity between revenues and expenditures was increasing.
More specifically, county expenditures jumped 17.2 percent, while revenues climbed 13.4 percent. Total city expenditures (excluding New York City) increased 8.4 percent during this time frame, but revenues only increased 6.4 percent. And town expenditures grew 12.9 percent, but revenues increased only 7.1 percent.
Additional findings in the report include:
In light of these and other factors, DiNapoli will implement an early warning fiscal stress monitoring system in January that will identify signs of budgetary strain in local communities sooner so that corrective actions can be taken before a full financial crisis develops.
Details of the new fiscal stress monitoring system were announced in September and the Comptroller’s office recently completed the process of receiving comments from local officials about the program. DiNapoli said the system will calculate and publicize an overall score of fiscal stress for municipalities and school districts across the state.
The monitoring system was announced in conjunction with a report examining the demographic and financial trends of New York's 61 cities (excluding New York City) over the past three decades. The report found that many cities are struggling to balance budgets and revitalize deteriorating local economies.
DiNapoli has also begun to issue fiscal profiles on select cities across the state. Earlier this month, the Comptroller profiled the cities of Niagara Falls and Salamanca. The reports will help further inform officials and citizens on some of the unique environmental and systemic pressures facing New York’s cities. As part of this effort, DiNapoli will also release in-depth reports on some of the issues that contribute to the financial pressures on local governments.
For a copy of DiNapoli’s report on New York’s cities visit: http://www.osc.state.ny.us/localgov/pubs/fiscalmonitoring/pdf/nycreport2012.pdf
For a copy of DiNapoli’s fiscal monitoring system plan visit:
Click here to view the Local Government Fiscal Profiles Video.
For a copy of the annual report visit: http://www.osc.state.ny.us/localgov/datanstat/annreport/12annreport.pdf