The task of jump starting New York’s struggling economies is going to require a lot of work from lawmakers in Albany; but, is needed to help local governments keep up with rising costs. Last week, officials got a sobering reminder of what’s at stake when Detroit declared bankruptcy, because several upstate cities face the same issues as the Motor City. Capital Tonight’s Nick Reisman tells us more.

 

 Detroit last week became the latest and largest city to declare bankruptcy in American history. That distinction however nearly fell on New York City in the 1970s.

“Certainly, had New York City slipped into bankruptcy, it would have been devastating for the entire state, probably for the entire nation,” said State Comptroller Tom DiNapoli.

The nation’s largest city and financial center going bankrupt seems unthinkable in 2013. But it was a real possibility more than 30 years ago until state and city officials worked to resolve the crisis through a control board and massive bonding plan. Former state Senator Seymour Lachman, now the director of Wagner College’s Carey Center said it was Governor Hugh Carey’s ability to seek compromises with labor and business that drove the success.

“He and his best and the brightest team of assistants were only able to do that because he said we’re all going to give up something,” said Seymour Lachman, Carey Center Director.

But is New York prepared for the next local government on the verge of bankruptcy? Cities like Rochester, Syracuse and Utica face similar problems that Detroit is saddle with — a shrinking tax base and population combined with soaring costs for pensions and public services.

“There certainly are situations that are similar to Detroit but not yet as severe,” said EJ McMahon, Empire Center for NYS Policy.

McMahon also points to affluent communities like Rockland County and Long Beach that face significant budget problems due to bad decisions from local officials. Cuomo this year pushed for a new restructuring board to help local governments work through their budgetary problems. But McMahon says the state’s efforts haven’t gone far enough.

“Governor Cuomo’s creation of what he calls a local financial restructuring board seems to be a way to put off confronting these problems and put off creating these types of mechanisms to really force change on the local level,” said McMahon.

Comptroller Tom DiNapoli disagrees. Combined with the governor’s restructuring board, which he sits on, and an early warning system for fiscally distressed communities, DiNapoli said state officials hope to avoid any municipalities officially going broke.

“I think we need to look at how we can coordinate these different efforts in a positive way because none of us want to see the failure that would be represented by a community feeling they have to go into bankruptcy,” said DiNapoli.

You may also like

Pandemic, recession don’t bring down school budgets

Stephen T. Watson This year's school elections were delayed and then shifted entirely to voting by mail thanks to the Covid-19 pandemic, which also shut down schools here and across the country. District officials worried this new method of Read More

The good, the bad and the ugly in Cuomo’s budget

“We are at the early stages of what shapes up as the biggest state and city fiscal crisis since the Great Depression,” said E.J. McMahon of the Empire Center. “Borrowing and short-term cuts aside, the budget doesn’t chart any clear path out of it.” Read More

Economic Experts Discuss Long-Term Impacts of Coronavirus

"My prediction for now is this is going to be the most severe and prolonged fiscal crisis New York state and its local governments have seen, really since the Great Depression when government did not operate at the scale it now operates," Empire Center Research Director E.J. McMahon said. Read More

Medicaid cuts make the state budget, with some tweaks

Bill Hammond, director of health policy at the conservative-leaning think tank the Empire Center, suggested this is because the proposed cuts are meant to slow the otherwise rapid growth in Medicaid spending, which means an increase is still possible.  Read More

Gov. Cuomo’s Lawsuit on Pres. Trump’s Tax Cuts Dismissed

But according to the Empire Center, a non-profit group based in Albany, the overall impact of the Trump tax cuts actually benefited most state residents. Read More

EDITORIAL: State schools continue spending more for less

As reported by the Empire Center last week, “The number of students enrolled in New York state public schools is the lowest recorded in 30 years.” Since 2000, enrollment in public schools has declined by more than 10 percent statewide with most of it upstate as enrollment in New York City schools has increased 1.3 percent in the last 10 years. Students are not leaving to go to private or parochial schools either because they, too, are showing declines, down about 8 percent in the last decade. Read More

$1 billion semiconductor plant: ‘Flashy mega-project’ or ‘transformational investment’ for New York?

"The state is continuing its strategy of pursuing flashy mega-projects instead of making New York more attractive for all businesses. We're now in the second decade of this approach, and it's still failing to deliver the promised results," Girardin said. "This is the sort of economic development strategy that politicians turn to when they don't want to take on the tougher questions." Read More

Cuomo blames lawmakers for plate fee set by his administration

The new replacement policy, which was tucked into a press release announcing new plate designs, has been criticized as a "revenue enhancer wrapped in a public relations ploy" by E.J. McMahon of the fiscally conservative Empire Center for Public Policy. Read More

Subscribe

Sign up to receive updates about Empire Center research, news and events in your email.

CONTACT INFORMATION

Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100

General Inquiries: Info@EmpireCenter.org

Press Inquiries: Press@EmpireCenter.org

About

The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.

Empire Center Logo Enjoying our work? Sign up for email alerts on our latest news and research.
Together, we can make New York a better place to live and work!