Report shows 30 municipalities in New York burdened by ‘fiscal stress’

A report released Wednesday by New York State Comptroller Thomas DiNapoli found that 30 municipalities ended 2020 in some type of fiscal stress, with nine communities facing “significant” issues.

The figures are almost identical to the 2019 report, which identified 31 counties, cities, towns and villages in some type of financial distress. However, only six communities were deemed to have “significant” stress last year.

The report covered communities that operate on the calendar year, according to a release from the comptroller. Despite the COVID-19 pandemic, DiNapoli said in a statement that many municipal governments found ways to persevere.

“Federal assistance, the restoration of state aid and resurging revenue have provided them much-needed relief. However, those designated as stressed are less likely to have the flexibility to adapt to fiscal challenges long term,” he said. “Local officials must budget and plan carefully to avoid fiscal stress and manage their communities through the uncertainties created by the pandemic.”

DiNapoli’s office determines fiscal stress by reviewing a number of indicators for each entity. Those include year-end balance, cash position and operating deficits. Municipalities receive points for each metric.

Those earning at least 45 points out of 100 are considered “susceptible” to stress. Those scoring 55 points are deemed to have “moderate” stress, while any government with 65 or more points is under “significant” stress.

Of the nine “significant” municipalities, Poughkeepsie received the highest score at 78.3, Long Beach scored 77.1 and Amsterdam finished at 75. Others in the category included Yonkers, Island Park, Valley Stream, Wappinger Falls, Niagara Falls and Caneadea.

Those facing fiscal stresses face some common issues, according to the report. Of the 30 that were found to be under some type of stress, all of them were found to have low fund balances and 86.7% had operating deficits. Low liquidity was a common factor for more than 73% of those identified.

“Over time, low fund balances, weak cash positions, and lost revenues make sustaining the functions of government or providing constituent services untenable,” the report stated. “Thus, while most local governments managed to avoid a stress designation in the initial year of the economic crisis, fiscal stress may increase for them in the next few years if the economic recovery falters.”

DiNapoli’s report noted that 17 were repeats from 2019. Amsterdam, Long Beach, Niagara Falls and Poughkeepsie were under “significant” pressure for both years.

The number of communities facing stress continued to go down, as it has every year since 2014. However, the report warned against taking a lot of stock in that because of the number of municipalities that filed too late to be scored.

The comptroller’s office uses annual reports, which municipalities must submit within 120 days after their fiscal year ends.

For the 2020 report, 173 governments did not submit in time, compared to 174 for 2019. Those figures are up significantly from prior years, as only 139 missed the deadline in 2018.

Among those that weren’t scored this year include the cities of Ithaca, Mount Vernon and Rensselaer, as well as Greene and Ontario counties. DiNapoli’s report said entities that fail to file on time tend to lack proper management and transparency.

New York City is excluded from the review; the city has its own Office of Comptroller for conducting such studies.

This article was originally posted on Report shows 30 municipalities in New York burdened by ‘fiscal stress’

Be the first to comment on "Report shows 30 municipalities in New York burdened by ‘fiscal stress’"

Leave a comment

Your email address will not be published.


*