The state’s local governments are facing financial challenges, and state Comptroller Tom DiNapoli recently announced a financial stress monitoring system to identify budget strains, Gannett’s Haley Viccaro reports.
DiNapoli delivered a keynote address on Monday at the Rockefeller Institute’s “Fiscal Crisis Facing New York’s Local Governments” event. He said local governments are forced to rely on revenues generated through taxes due to shrinking federal and state aid.
“State aid and incentives for municipalities have declined or have been stagnant for the past five years,” DiNapoli said. “Since 2008 and 2009, aid has been reduced by $50 million and it has been completely eliminated for the city of New York.”
The fiscal stress monitoring system, announced in January, evaluates local governments and school districts and analyzes financial and environmental indicators that may alert that the unit is under fiscal stress. DiNapoli said the system would allow for solutions to be implemented, easing the stress on local governments.
“We need to start looking for more long term structural changes that would help us down the road,” DiNapoli said. “It is time for a more comprehensive agenda to assist our local governments.”
About 300 local governments had deficits in 2010 and 2011 and there is widespread decline of property values, which has created a pressure on the revenue from property taxes, DiNapoli said.
State aid increased by $412 million since 2001, which is 1.2 percent annually or half the rate of inflation, a January report released by the comptroller’s office said. DiNapoli said municipalities eliminated 32,000 jobs since 2009 due to aid increases failing to meet the rate of inflation.
“It’s a different economy in terms of job creation than it was,” DiNapoli said. “You look at past post-recessionary time, where typically it was Wall Street that led the way in job creation, that’s not what we are seeing now.”
DiNapoli said New York has recovered all of the jobs it lost since the 2008 economic recession. New York City and the five boroughs have regained 175 percent of the jobs lost during the recession. Ithaca regained nearly four times as many jobs since the recession and Rochester and Buffalo regained about three-quarters of the jobs it lost.