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Comptroller to Launch ‘Early-Warning’ System for Local Fiscal Stress
Posted By Jessica Bakeman On January 28, 2013 @ 12:25 pm In Other | Comments Disabled
State Comptroller Thomas DiNapoli announced on Monday his office has finalized plans to create a fiscal monitoring system that publicly identifies local governments under financial strain.
DiNapoli’s office announced the “early warning” system in September, allowing the state’s local governments and school districts to respond during a 60-day comment period. More than 85 local government and school district officials, as well as a number of affiliated organizations, provided a wide variety of feedback, DiNapoli said Monday.
“Many local officials have made it clear this monitoring system will play a helpful role in highlighting the financial trends in communities across New York,” the comptroller said in a statement. “By presenting a realistic picture of the economic and budgetary challenges facing our local governments, corrective actions can be taken when appropriate to avoid a fiscal crisis. It also provides the public an objective analysis they can use to participate in local financial decision-making.”
Many local governments and school districts have warned that growing pension and health insurance costs, coupled with a 2 percent property-tax cap, have left them struggling to make ends meet. Some governments have said they’re near fiscal insolvency and have urged the state to implement mandate relief.
Gov. Andrew Cuomo has committed state funding to mitigate growth in Medicaid costs. He also created a lower rung in the pension system that’s expected to cut long-term costs. Last week, in his budget address, he presented a pension smoothing plan that would allow local governments to pay a stable rate over a long period of time rather than paying high employer contributions in the short term.
Still, local governments have argued Cuomo’s measures are not enough to keep them afloat.
DiNapoli’s office will calculate and publicize an overall score of fiscal stress for approximately 2,300 municipalities and school districts across the state using data the local governments have already submitted. They will be listed as in “significant fiscal stress,” in “moderate fiscal stress,” “susceptible to fiscal stress,” or “not in fiscal stress.”
The early warning system will include nine financial indicators, such as cash-on-hand and patterns of operating deficits, together with broader demographic information like population trends and tax-assessment growth. The system will start by analyzing those localities whose fiscal year ended December 31, 2012.
Once the monitoring system has identified local governments and school districts experiencing fiscal stress, DiNapoli’s office said it will provide budget reviews, technical financial assistance, guidance on multi-year financial planning, financial management publications and training.
“State Comptroller DiNapoli realizes many local governments are facing the most challenging fiscal environment in generations,” Ulster County Executive Mike Hein said in a statement. “By implementing a comprehensive fiscal monitoring system, those of us at (the) ground level will be better equipped to make appropriate financial decisions based on our specific budget circumstances.”
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