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NYS Comptroller

THOMAS P. DiNAPOLI

Press Releases

September 25, 2014, Contact: Press Office (518) 474-4015

DiNapoli: Several Communities Remain in Fiscal Stress

‘Early Warning’ System Scores Counties, Towns and Cities on Financial Health

State Comptroller Thomas P. DiNapoli’s Fiscal Stress Monitoring System has designated nearly three dozen municipalities across the state as fiscally stressed. The list includes ten counties, seven cities, 17 towns and one village. Nearly all the communities in stress had low fund balances, operating deficits and limited cash on hand.

This is the second year DiNapoli’s office has evaluated the financial stability of local governments. Last year, 19 of these 35 communities were designated as fiscally stressed.

“For the second straight year, our ‘early warning’ system has identified municipalities from every region of this state that are experiencing some level of fiscal stress. Clearly, New York’s local governments continue to face daunting challenges that strain their finances and are pushing them to the edge,” said DiNapoli. “Last year, I implemented this system to provide New Yorkers with an objective analysis to help them understand the economic and budgetary challenges facing their communities. These fiscal scores should serve as a starting point for frank discussions at the local level so actions can be taken before a fiscal crisis develops.”

This latest round of scores is based on 2013 financial information provided to DiNapoli’s office by local governments as of Aug. 29, 2014 and includes only municipalities with fiscal years ending on Dec. 31, 2013. In New York, all counties and towns, 44 cities and 10 villages have a calendar-based fiscal year – a total of 1,043 communities.

Based on 2013 financial statements, 10 entities have received the highest designation of “significant fiscal stress.” This includes the counties of Rockland, Monroe, St. Lawrence and Schuyler; the cities of Mechanicville and Poughkeepsie; the towns of Jasper and German Flatts; and the village of Islandia. Eight communities have been listed in the second highest category of “moderate fiscal stress.” This includes the counties of Suffolk and Broome; the cities of Fulton and Glen Cove; and the towns of Colonie, Cherry Valley, Coeymans and Hempstead. Another 17 municipalities have been listed in the third category as “susceptible to fiscal stress.”

DiNapoli’s monitoring system evaluates local governments on 23 financial and environmental indicators and creates an overall fiscal condition score. Indicators include cash-on-hand and patterns of operating deficits, together with broader demographic information like population trends, poverty and unemployment.

The Comptroller also issued a report with today’s fiscal stress scores that discusses the shared characteristics among municipalities by region and class of local government and highlights the primary drivers of score changes from 2012 to 2013.

The report also found nearly all communities listed in fiscal stress have low fund balances (100 percent) and operating deficits (97 percent). The largest discrepancy between stressed and non-stressed municipalities was the entity’s cash position – the ability to fund operations from available cash. More than 82 percent of stressed communities experienced low liquidity in 2013 versus only 4 percent for those with no stress designation.

The most common environmental indicators among stressed municipalities are increases in child poverty, high unemployment and decreases in state and federal aid.

Other notable findings from the report include:

  • Last year, there were 38 localities with a Dec. 31, 2012 fiscal year that were designated as fiscally stressed;
  • There are a total of 56 entities that were designated in fiscal stress in either 2012 or 2013 or both;
  • Eighteen communities moved into a higher stress level than in 2012;
  • Twenty-three localities moved into a lower stress category;
  • Although 67 percent of municipalities experienced a change in their score, only 4 percent saw a change in their overall designation;
  • Nearly 18 percent of counties and 16 percent of cities are in fiscal stress, while less than 2 percent of towns are in stress; and
  • Downstate communities are more than twice as likely to be in some level of stress as upstate communities (6.8 percent downstate vs. 2.8 percent upstate).

The fiscally stressed governments identified today join the 15 non-calendar year villages evaluated earlier this year and found to be in stress. This brings the total number of municipalities designated in stress for the 2013 fiscal year to 50. Additionally, the monitoring system identified 87 school districts in fiscal stress based on the fiscal year end of June 30, 2013.

For a copy of the report, visit:
http://www.osc.state.ny.us/localgov/fiscalmonitoring/pdf/FSMSResultsFor2013Entities.pdf

To view the complete, sortable list of fiscal scores for municipalities, visit:
http://wwe1.osc.state.ny.us/localgov/fiscalmonitoring/fsms.cfm

For more detailed information about the Comptroller’s fiscal stress monitoring system and to view reports related to local government fiscal stress visit:
www.osc.state.ny.us/localgov/fiscalmonitoring/index.htm

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

 

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