DiNapoli warns of fiscal crisis facing local governments

Posted at: 04/08/2013 5:52 PM
By: Beth Wurtmann

ALBANY - "The reality is, this is the new normal for the foreseeable future. Difficult budgeting choices remain and will continue."

That 'new normal,' according to State Comptroller Tom DiNapoli, is a fiscal squeeze on local governments.

The Comptroller said local leaders should heed a warning: treat the situation not as a short term crisis, but instead, with a long term plan.

"I think the more that we could do to avoid localities from really getting to the point of stress where they need a control board, that would be the smart thing to do," DiNapoli said.

Speaking at the Rockefeller Institute Monday, DiNapoli outlined the decline in state aid to municipalities, in addition to sagging property and sales tax revenues. All at a time when local governments have had to dish out more in pension and health care contributions.

"In our case we're seeing a decline in revenues as people have less money to spend so less sales tax coming in. And yet more demand for services," said Kathy Jimino, Rensselaer County Executive.

While some regions have seen job growth, DiNapoli noted that certain areas are still suffering. New York City regained 175-percent of the jobs lost at the start of the economic downturn, but the Capital Region has only recovered 51-percent in jobs. Glens Falls - only 16-percent.

DiNapoli said he's pushing for increased state aid to stem the pain, calling for more accountability for the way funds are spent.

"As far as the days of the past when there was lots of reserve funds, lots of money there,  it's a different time and I don't think it's going to change," said Paula Mahan, Colonie Town Supervisor.

In several weeks, the Comptroller will be releasing a report that measures how local governments and school districts are doing in handling fiscal challenges.