Comptroller to classify financial condition of local governments
State Comptroller Thomas P. DiNapoli announced Monday his office has finalized plans to implement a statewide fiscal monitoring system that would publicly identify local governments experiencing financial strain.
DiNapoli's office drafted the "early warning" monitoring system last September and shared details of the proposal with all of the state's local governments and school districts for their review 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.
"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," DiNapoli said. "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."
Using data already submitted by more than 3,000 local governments, DiNapoli's office will calculate and publicize an overall score of fiscal stress for approximately 2,300 municipalities and school districts across the state. 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 such as population trends and tax assessment growth. The system will start by analyzing those localities whose fiscal year ended Dec. 31, 2012, and later apply it to villages and school districts whose fiscal years end at various periods throughout the year.
Once the monitoring system has identified local governments and school districts experiencing fiscal stress, an array of services will be offered by DiNapoli's office. These include budget reviews, technical financial assistance, guidance on multi-year financial planning, financial management publications and training.
A number of statewide associations and local officials praised the Comptroller's effort.
New York State Government Finance Officers' Association President Greg Maxwell said, "We support the efforts of the Office of the State Comptroller to assist local governments in identifying areas of fiscal stress. As an association dedicated to promoting quality financial management, we encourage government finance officers and governing boards to utilize the vast array of financial data available to make well-reasoned decisions to help municipalities address current and future financial challenges. We thank Comptroller DiNapoli for the opportunity to review and provide substantive feedback on the fiscal stress monitoring system, and look forward to continuing to partner with OSC to develop constructive tools to assist local governments in their financial planning."
New York State School Boards Association Executive Director Timothy G. Kremer said, "The New York State School Boards Association applauds the comptroller's attention to the often dire fiscal challenges facing schools and local governments, as well as his willingness to offer assistance during these difficult economic times."
Buffalo City Comptroller Mark J.F. Schroeder said, "Comptroller DiNapoli's fiscal monitoring system is like a stress test for municipalities and school districts. The sooner we know about potential problems, the sooner we can address them, and the more effective our solutions will be. Having just emerged from a decade under a control board, the people of Buffalo know how devastating a fiscal crisis can be. This monitoring system will help prevent such catastrophic scenarios from occurring in communities across the state."
For more detailed information about DiNapoli'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.