Late in 2012, New York State Comptroller Thomas DiNapoli launched the Fiscal Stress Monitoring System, an early warning system for municipal entities in the state that were suffering financial stress. The program’s purpose was described this way in a webinar:
To identify both local governments and school districts that are in fiscal stress, as well as those nearing fiscal stress.
To identify for local officials the need to take actions in a timely manner that change their financial trends for the better.
This has the potential to be a great system for New York’s fiscally weak cities. Having closely followed several municipal bankruptcies in California, I know that public accounting systems are often weak and public officials are unaware of the extent of their fiscal stress until there is no money to make upcoming payroll or debt service payments. At that point there is no space to take corrective action – The Titanic has already hit the iceberg.
Moody’s downgrades to Baa2 from A2 for the City of Poughkeepsie’s (NY) General Obligation debt; outlook remains… bit.ly/141pKy4