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November 19, 2009



DiNapoli: Audits Have Identified $690 Million In
Local Government Savings

New York State needs to work creatively with its local governments to address deteriorating fiscal situations resulting from the current recession, according to the 2009 Annual Report on Local Governments released by State Comptroller Thomas P. DiNapoli. The report includes findings from DiNapoli’s local government and school district audits that identify nearly $700 million in potential cost savings and revenues that could benefit local property taxpayers. DiNapoli noted the savings could be as much as $950 million if all local governments and school districts adopted these ideas.

“Now more than ever, every dime counts, especially when they’re taxpayer dimes,” DiNapoli said. “We’re in the middle of a horrific fiscal storm, and local governments have to find an umbrella. Local governments need to explore new ways to share services or consolidate functions to promote cost savings. And the state needs to do its part. The state can’t fix its budget problems by dumping responsibilities on local property taxpayers. It’s all about protecting taxpayer money at every level of government. We can’t waste any taxpayer dollars.”

Recent DiNapoli audits have identified approximately $690 million in potential savings and revenue enhancements for local governments and taxpayers. DiNapoli noted his auditors found school districts may have as much as $407 million in excessive employee benefit reserves that could be used to provide property tax relief or pay down debt.

DiNapoli said New York’s fiscal crisis is not unique. A recent survey by the National League of Cities revealed that city revenues across the nation failed to keep up with spending increases in 2008 and that nine out of 10 city officials believe they are less able to meet their city’s financial needs this year than last.

DiNapoli’s report highlights a number of tools available through his office to assist local governments, including audits, cost-saving guidance, research publications and training. Earlier this year, DiNapoli launched his new Local Government Leadership Institute to highlight fiscal best practices and encourage shared services. DiNapoli’s Open Bookwebsite (www.openbooknewyork.com) helps localities make cost comparisons with other municipalities. DiNapoli said he’s committed to identifying more savings opportunities and working with local governments and school districts to promote increased efficiency.

Highlights from the report include details on the recession’s impact on New York State communities:

  • More than 847,000 New Yorkers are unemployed, the highest unemployment rate since 1977;
  • More than 15,000 homes are in foreclosure;
  • New York’s property taxes continue to be among the highest in the nation by all methods of measurement, making this a difficult revenue alternative for local governments;
  • Sales tax collections have dropped by 7.2 percent for the first three quarters of 2009 compared to last year;
  • For the lion’s share of New York’s towns, mortgage tax collections fell 32 percent in 2008; and
  • New York will be slow to recover economically, and localities will continue to face increased fixed costs (particularly in pension contributions, retiree health care costs and infrastructure needs) at a time of stagnant revenues.

The 2009 Annual Report on Local Governments also highlights the services and activities of OSC’s Division of Local Government and School Accountability, and summarizes financial trends on all local governments in New York State for the last 10 years.

For a copy of the report, visit: http://www.osc.state.ny.us/localgov/datanstat/annreport/09annreport.pdf

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