Analysis of Fiscal Stress in the Cities of New York State Office of the State Comptroller Alan G. Hevesi, Comptroller Division of Local Government Services and Economic Development Mark P. Pattison, Deputy Comptroller
Fiscal Health: A municipality can finance services on an ongoing basis • Endure short-run pressures such as revenue shortfalls or unforeseen expenses • Maintain adequate service levels • Balance risks with revenues and adequate fiscal management • Adjust to long-term challenges
Measuring Financial Condition • Desired Characteristics of an Indicator System • Comprehensive • Handles Complexity • Operationally manageable • Produces reliable and valid results • Examples • Rating Agencies • School District Financial Indicator System • OSC Risk Assessment Indicators • GFOA Financial Indicators for Small Cities
Environmental Factors: Measurement Financial Condition
Organizational Factors: • Timeliness of Financial Report • Budget Variances
Financial Condition Indicators: Five Factors Account for 73 Percent of the Total Variance
Summary of Findings • Demographic factors and management indicators can be used to identify fiscal stress. • Stress is often apparent in these measures before it is evident in fiscal data. • Early identification can assist in the prevention of fiscal stress and the development of intervention strategies. • Strong linkage of demographic factors and fiscal stress implies that for major upstate cities, stress may be unavoidable.