A call for monitoring municipal heart beats
New York Stateâ€™s Comptroller Tom DiNapoli has published the results of his Fiscal Stress Monitoring System. Taxpayers in many communities have been identified as having moderate to significant stress. This is a clarion call to those communities to look more closely at their revenues and expenses before a crisis.
DiNapoli started developing the system last year and went through a multistep process. From his press release:
DiNapoli began shining a spotlight on fiscal stress in 2012 after his office noticed a number of alarming trends among local governments. For instance, his auditors found that nearly 300 local governments had deficits in recent years, and more than 100 had inadequate cash on hand to pay their current bills. DiNapoliâ€™s office drafted the â€˜early warningâ€™ monitoring system last September and shared details of the proposal with all of the stateâ€™s local governments and school districts for their review during a 60-day comment period. More than 100 local government and school district officials, as well as a number of affiliated organizations, provided feedback.
The initial fiscal stress list was based on financial information provided to DiNapoliâ€™s office by local communities as of May 31, 2013 and includes only municipalities with fiscal years ending on Dec. 31, 2012. In New York, all counties and towns, 44 cities and 10 villages have a Dec. 31 fiscal year end â€“ a total of 1,043 communities.
Here are the communities with significant and moderate stress:
The fiscal stress stretches from Long Island to western upstate New York. Note the presence of Albany, the state capitol, on the list. Iconic Niagara Falls just came to an agreement over casino revenues, which should improve its fiscal position.
DiNapoliâ€™s system is a big step forward for muniland, but I suggest adding a measure of municipal debt and pension liabilities. These are costs that are nearly impossible to adjust outside of bankruptcy and can weigh heavily on community expenses.
Cheers for DiNapoli. Other states should have a look at his Fiscal Stress Monitoring System.
ONYSC: Complete, sortable list of municipalitiesâ€™ fiscal scores and supporting data