January 29, 2013
DiNapoli: Utica Facing Continued Fiscal Challenges
The city of Utica continues to struggle with recurring budget gaps and has nearly depleted its fund balances, according to a fiscal report issued today by State Comptroller Thomas P. DiNapoli. The report is the latest in a series of fiscal profiles on cities across the state.
Over the past four years, the city used $5.4 million of its available fund balance and has left its contingency and tax stabilization reserve underfunded by $2 million. In fiscal year 2011-12, the city came close to depleting both its fund balance and water trust fund to cover budget shortfalls.
“The financial situation in Utica is far too familiar to communities across upstate New York,” said DiNapoli. “A slow recovery from the Great Recession has forced the city to raise taxes, cut jobs and deplete its reserves in order to balance the budget. Mayor Palmieri clearly understands the challenges facing Utica and has worked diligently to reverse the city’s downward fiscal trends. The mayor will need to continue to partner with his colleagues in city government to balance revenues against spending in order to keep Utica’s finances from deteriorating further.”
The city’s financial struggles can be traced back to a number of socio-economic factors, according to the Comptroller’s report. The report outlines Utica’s challenges with a declining population, high rates of poverty and unemployment, slow economic growth and an overreliance on state and federal aid.
Most notably, the report showed that 24.3 percent of families in the city live in poverty, compared with 10.8 percent statewide. Further, the city’s unemployment rate (9.6 percent) is noticeably higher than the statewide average (8.3 percent).
Other findings in DiNapoli’s report include:
“Comptroller DiNapoli’s fiscal profile of the city shows that he understands our problems while his willingness to listen proves that he cares about our people,” said Mayor Robert Palmieri. “As Mayor, I have already made many hard decisions, but ahead of us lies nothing but more difficult choices. With Comptroller DiNapoli’s counsel and patience, I am confident that we can finally put an end to Utica’s long history of financial mismanagement.”
In the coming months, DiNapoli will issue fiscal profiles on select cities across the state to 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.
DiNapoli’s office recently finalized details of a new fiscal monitoring system that will calculate and publicize an overall score of fiscal stress for municipalities and school district across the state. The ‘early warning’ system will identify those headed toward fiscal crisis and give local officials and the public sufficient time to consider options for turning things around.
For a copy of the Utica profile visit: http://www.osc.state.ny.us/localgov/pubs/fiscalprofiles/utica.pdf