Nearly 300 local governments had budgetary deficits in 2010 or 2011 because of the recession, and more than 100 did not have enough cash on hand to pay current bills, state Comptroller Thomas DiNapoli said Wednesday.
Local governments lost more than $400 million during the recession, a report from the comptroller’s office found.
Some municipalities and school districts now are increasingly vulnerable to unexpected emergencies, mandates and spikes in the costs of goods and services, a news release from DiNapoli’s office said.
The report is based on an analysis of data from 4,000 local governments and recent audits.
“Our communities are facing a challenging economic reality,” DiNapoli said in the release. “There are no quick fixes, and any future economic shocks could have a devastating impact on some communities.
“Difficult choices are ahead, but they start with better long-range planning and an honest conversation about the numbers. By preparing more accurate and realistic budgets, local officials will be better able to deal with these issues without overburdening taxpayers.”
Cities seem to be at the greatest risk, the report found, but all local governments have been impacted by shortfalls in expected revenues since the recession, the release said.
County sales tax collections dropped by 5.9 percent during the economic downturn, the report found. It has taken three years for collections to return to 2008 levels, it said.
Property values in nearly half of the counties in Upstate New York have declined since 2008, the report said, and state Aid and Incentives for Municipalities (AIM) payments has been reduced by $50 million.
Eight local governments, including the village of Lyons in Wayne County, are close to exceeding their constitutional tax limit, the report said.
A copy of the report is available at www.osc.state.ny.us.
(c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.
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