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Local Governments in NYS Face Longterm Fiscal Crisis

(NYS) Emphasis during a week-long conference at the Rockefeller Institute of SUNY Albany is on structural, rather than cyclical, budget imbalances. While the revenue effects from the 2008-9 recession are still being felt by many local governments – especially here in upstate NY, longterm projections of spending by local governments far outstrip projections for their revenues.

NYS comptroller Thomas DiNapoli kicked off the conference on April 8, warning that local governments are entering a period of greater self reliance as state and federal aid to localities is cut in response to fiscal pressures faced by these higher levels of government. DiNapoli says: “The fiscal challenges confronting local communities are not a passing problem”.1

DiNapoli might sympathize with some local governments – he does advocate greater support from NYS, but he is continuing his call for greater transparency in local government and for their accountability. He warned that an upcoming monitor of locality finances published by his office could be unwelcome news to many local governments.

Other keynote speakers at the conference include former NYS lieutenant-governor Richard Ravitch, who, together with former Fed chairman Paul Volcker, co-initiated a “task force” to tackle state and local budget crises. Ravitch brings to the discussion his experience with NYS public finances and recommendations from the task force. He spoke at the conference on April 11, echoing the warning to local government about structural fiscal problems by DiNapoli.2

Labor and working families here in WNY have a keen interest in how both state and local governments solve their financial problems. Revenue generation and spending cuts that adversely affect working families are nonstarters with working families, as they try to maintain decent living standards.

Cuts to the number of local government employees in NYS – who are instrumental in providing many government services to the working poor, already number many thousands. Even as government spending is being slashed, corporate welfare is doled out by local agencies here to the tune of $397 million (see “The Niagara Frontier Tax Give-away” by WNY-WJ). Working families believe that it is well past time for wealthy recipients of benefits from tax cuts and corporate welfare to pay their fair share in order to provide democratically determined government services.

1 “DiNapoli: Fiscal stress for local govs “new normal”” by Karen DeWitt for North Country Public Radio. <http://www.northcountrypublicradio.org/news/story/21767/20130409/dinapoli-sounds-alarm-on-schools-municipalities >

2 “Ravitch warns of fiscal crisis for local governments” by Mark Scott for WBFO News. <http://news.wbfo.org/post/ravitch-warns-fiscal-crisis-local-governments >



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