A Statewide Fiscal Control Board?

By Richard E. Rising

Several news organizations have reported on discussions between Governor Cuomo and State Comptroller DiNapoli about the need to establish a statewide control board to address the increasing fiscal stress being experienced by local governments, including school districts, in New York state.  This comes on the heels of a recent report by the state comptroller, as reported and linked to in this blog, “Grim New for Local Governments from the State Comptroller.”  The report draws sobering conclusions about growing the financial problems being experienced by local governments, which are caused by a host of factors, including population loss, declining or stagnant property assessment, high rates of poverty and deteriorating infrastructure.

There is a growing recognition that these problems are long-term structural ones and not temporary caused by the current recession.  Also, what is significant is the discussion that state government may need to play a more proactive role to reverse the decline in the financial positions of many local governments. The initial response from some large-city mayors to the concept of establishing a statewide control board has been predictably negative.  They cite the need for local officials to be part of crafting any state response so as to avoid a state-mandated “one size fits all” solution.  And, less we forget, local officials continue the cry for New York state to act on mandate relief, which today remains elusive and which, as we reported in our earlier blog, was not even mentioned in the state comptroller’s report.

State control boards are not new in New York. But it will be interesting to see if more boards are individually created for the growing list of troubled local governments, or if legislation is advanced to create a single statewide control board and how this might work. The financial problems of local governments have been well documented.  There seems greater recognition that the time for solutions and actions is now.  How state fiscal control board(s) fit into the mix of solutions that are required remains to be seen.  Stay tuned for more.