Distressed municipalities, which make up a large number of cities, villages and towns outside of the New York City area, were a hot topic in a meeting held by Gov. Andrew Cuomo on Tuesday.
Cuomo detailed a proposal to create a Financial Restructuring Board, which would help distressed local governments manage their finances. The proposal includes an alternative binding arbitration process that municipalities and unions could voluntarily opt for to resolve contract issues in an expedited procedure.
"Growing retirement costs, declining populations, decreasing property values, and the recent fiscal crisis have all contributed to the difficult financial issues facing localities today," said Cuomo. "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."
In today's presentation, the governor detailed how more money is not the solution to help local governments solve their fiscal issues. The state's existing Aid and Incentives for Municipalities program does not reflect local government need or performance, and already constitutes a large percentage of the budgets of New York's largest cities
The Financial Restructuring Board would include the state budget director, secretary of state, attorney general, state 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.
"In my 14 years as mayor of the city of Jamestown, in the far reaches of Western New York, this is the first time I can say that there has been an overall recognition and attempt to understand the deep-seated structural economic problems that cities in particular and local governments in general across the upstate region have been facing for multiple generations and an understanding that it's going to take more than the same old same old approaches," said Jamestown Mayor Sam Teresi. "I see this proposal today as another tool to go into the tool chest for local governments. I like the notion of it because it is voluntary and it presents itself as a viable alternative to a more invasive, control board-type of approach, which should always be done as a last resort by a local government and avoided at any possible cost."
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.