State Comptroller Thomas DiNapoli today announced plans to create an early warning monitoring system to identify municipalities and school districts that are showing signs of budgetary strain so they can be turned around before they are in a fiscal crisis.
DiNapoli’s office is going to calculate and publicize scores for the more than 4,000 local governments and school districts in the state. They will be classified as being in “significant fiscal stress,” “moderate fiscal stress” or “nearing fiscal stress.”
“Local officials are struggling to cope with considerable economic challenges and structural budget imbalances and the situation may only get worse,” the comptroller said in a statement. “That’s why my office is proposing an early warning system that will identify those headed down the path to fiscal crisis sooner and give local officials and the public sufficient time to discuss options for turning things around.”
DiNapoli said his office will distribute the proposed system to officials across the state during a 60-day comment period, and it will implement the system starting with communities whose fiscal year ends Dec. 31. Villages and school districts’ fiscal years end at various periods during the year.
Also today, DiNapoli released a report that examines the demographic and financial trends of the 61 cities in the state, excluding New York City. Those cities, whose fiscal challenges “have evolved over many years and are systemic,” are struggling to balance their budgets and revitalize deteriorating economies, he said.
Cities in the Hudson Valley and on Long Island are relatively healthy from an economic perspective when compared with upstate cities, the report said. “To be sure, cities in the Hudson Valley and Long Island region are not immune to significant fiscal challenges – Long Beach, Yonkers and Newburgh are examples of cities in the metropolitan region where budgetary stress is significant. Such issues may result more from fiscal policy choices than from inherent economic weakness,” it said.
Findings from the report include:
—Expenditures for cities have increased $2.7 billion since 1980 while revenues raised locally have gone up by $2.1 billion. State aid has increased from 16 percent to 21 percent of all revenues for cities in the past three decades as federal aid has dropped from an average of 17.5 percent of total revenues to 6.8 percent.
—Property taxes are outpacing home values and income levels, and many troubled cities are raising sales taxes and fees for services to compensate. But these revenues haven’t kept pace with growing expenditures due to a stagnant economy.
—Overall population decreased by 15 percent since 1980, particularly in upstate cities. Cities in the Hudson Valley and on Long Island had population increases of 6.8 percent between 1980 and 2010.