Gov. Andrew Cuomo has outlined more details for establishing a financial restructuring board as a resource for distressed local governments, particularly in upstate New York.
In the presentation Tuesday, the governor identified the high levels of financial dependency amongst upstate cities who have their budgets heavily supplemented by New York state. These include cities like Buffalo, which relies on the state for a third of its budget. Syracuse relies on the state for 24 percent; Rochester: 18 percent and by comparison Yonkers: 24 percent.
The board, that will take several months to establish, would provide a voluntary one-stop-shop for local governments facing chronic deficit shortfalls. Cuomo describes this model as a step before a financial control board.
Cuomo framed the proposal in the context of the almost 10,500 local governments in the state and the rising costs of local government. He also referred to the population loss in upstate of 1.4 percent per year as underpinning the need for reform. Drops in the tax base and falling property values have contributed to the crisis as well, he says.
"Growing retirement costs, declining populations, decreasing property values, and the recent fiscal crisis have all contributed to the difficult financial issues facing localities today. The Financial Restructuring Board will bring together state and local officials to help localities make tough decisions and solve this crisis now instead of kicking the can down the road."
Criteria for a local government to be declared under financial distress would include the panel's assessment of the costs of government, revenue potential and the demographics.
County or town consolidation would be one of the strategies that could utilized by the board, which will have control of a fund of $80 million to support consolidation and reorganization. Municipal consolidation has consistently been resisted at the voting booth. More detail from the Governor's office:
The proposal to help fiscally distressed municipalities includes the following details: Financial Restructuring Board: The Board would include the State Budget Director, Secretary of State, Attorney General, Comptroller, and one private sector restructuring professional. The Budget Director would establish standards to determine which local governments qualify as fiscally distressed. Fiscally distressed local governments would be able to request the assistance of the Board, and work together to identify a specific restructuring plan. Implementing Restructuring Plan: The 2013-14 Budget includes up to $80 million to assist local governments with reorganization plans. Recommendations of the Board would be binding upon any municipality that accepts funding. The Board may require development of multi-year financial plans, functional consolidation, mergers, shared services, fewer elected officials, and other measures. The Board would also serve as a binding arbitration panel: The Board would provide an alternative to the binding arbitration process for police, fire, or deputy sheriff unions if municipalities and unions agree. The Board would render an arbitration ruling within 9 months.
