State Comptroller Thomas DiNapoli has announced a “fiscal stress monitoring system” to provide an early warning of problems in local governments and school districts, which can only be a good idea. DiNapoli’s office also issued a report analyzing economic and fiscal trends in cities from 1980 to 2010.

A key finding:

The largest cost drivers for cities over the past 30 years have been personal service costs as well as health insurance and workers compensation. Pension costs have increased in recent years due to poor market conditions. Health care costs have risen significantly since the 1980s. Not surprisingly, given the economic backdrop for many cities, the above indicators show that many of New York’s cities, especially in upstate New York, are undergoing significant fiscal stress. In addition, some other cities with stronger economic bases are also experiencing problems, primarily as a result of poor management decisions, such as an over-reliance on non-recurring revenues, to balance budgets.

There some are interesting numbers in the report, including estimates of per-capita expenditure and personal income growth for cities during the 30-year period. Unfortunately, the total numbers may be somewhat distorted and comparisons hampered by the apparent inclusion of school budgets for the four cities in the sample (Buffalo, Syracuse, Rochester and Yonkers) that have fiscally dependent school districts. Comparing those cities in isolation, Yonkers had the higher rate of per-capita spending growth, but Syracuse had the largest discrepancy between spending and income.

cities-chart-sept2012-8506696
Source: Office of the State Comptroller

In other developments, Moody’s has assigned a “negative” outlook to its credit rating for Syracuse — a move that drew criticism from former Lt. Gov. Richard Ravitch.

Meanwhile, as noted here last week, Governor Cuomo continues to distance himself from the situation, suggesting he favors “individual” assistance rather than a comprehensive approach to the fiscal problems of localities.

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

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