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NYS Comptroller

THOMAS P. DiNAPOLI

News

From the Office of the New York State Comptroller

Thomas P. DiNapoli

January 6, 2017, Contact: Press Office (518) 474-4015

DiNapoli: Local Governments Challenged by Slow Revenue Growth

Many of New York’s local governments are coping with slow or no revenue growth, making it difficult for them to maintain services while keeping pace with rising fixed costs such as health care, according to the 2016 annual report on the state’s local governments released today by State Comptroller Thomas P. DiNapoli.

“New York’s municipal governments are seeing sales tax revenue growth slow and state aid remain essentially flat while they and school districts are coping with tax cap and tax freeze initiatives that limit growth in property taxes,” DiNapoli said. “As local governments adapt to changing circumstances, my office will continue to support them with training, analysis and guidance.”

Local government spending growth has increased between 0.9 and 2 percent annually since 2010.  Spending by school districts remained below 1 percent for three years starting in 2011, but ticked up at a higher rate in the last couple of years, when compared to counties, cities, towns, villages and fire districts, due to increases in state aid to schools.

DiNapoli’s report found that local sales tax revenue growth fell from 3.6 percent to 1.8 percent in the first nine months of 2016 from the same period a year earlier. While revenue collections varied by region, counties are particularly reliant on sales tax revenues.

School districts, towns and villages rely on the property tax for approximately half of their revenues. The property tax levy limit that took effect in 2012 effectively restricts reliance on property tax revenues to fund increases in local spending. In recent years, the tax cap’s allowable levy growth factor has been less than 2 percent.

Unrestricted state aid for municipalities (AIM) has been frozen at $715 million for five years. However, large financial settlements with banks and other financial institutions have bolstered state revenues and some of the windfall has been targeted to programs that help local governments.

Despite the noted financial pressures, fewer local governments have been designated in fiscal stress under DiNapoli’s fiscal stress monitoring system, with a particularly low frequency of stress in towns and villages (2.3 percent and 3.7 percent respectively). Counties and cities showed more signs of stress, but improved in 2015, while the number of school districts in stress was stable at 12 percent. Local governments have been able to balance budgets, even while many have expressed concern that the quality of local services may be suffering. 

In 2016, DiNapoli’s office completed over 500 audits of localities and schools and trained more than 10,000 local government officials and staff. The audits identified nearly $49 million in cost savings and revenue enhancements.

Read the 2016 Annual Report on Local Governments, or go to: http://www.osc.state.ny.us/localgov/annualreport/16annreport.pdf

For access to state and local government spending and more than 50,000 state contracts, visit www.openbooknewyork.com. The easy-to-use website was created by DiNapoli to promote openness in government and provide taxpayers with better access to the financial workings of government.

Albany Phone: (518) 474-4015 Fax: (518) 473-8940
NYC Phone: (212) 383-1388 Fax: (212) 681-7677
Internet: www.osc.state.ny.us
E-Mail: press@osc.state.ny.us