Long-Term Budget Legislation Stalls

ALBANY – Recent legislation aims to help municipalities with budgeting issues.

State Comptroller Thomas DiNapoli recently announced the introduction of a legislative proposal, submitted to the state legislature on April 1, aimed at helping municipalities improve long-term budget planning. The legislation specifically provides reimbursement to municipalities for the cost of hiring financial advisers to assist in the development of multi-year budget plans.

“Long-term budget planning is vital to the fiscal health of our localities,” DiNapoli said. “The tax cap and our state’s continued slow economic recovery underscore the need for accurate, balanced budgets reflecting realistic multi-year financial plans. State policymakers must continue to do their part to help localities find and implement real, lasting solutions. This proposal will help encourage municipalities to take action by offering them assistance in dealing with a potential impediment to these efforts.”

Assemblyman Andrew Goodell said that it is a good idea to look into long-term budgeting.

“Public officials are doing this informally, but this bill would make the process more formal,” Goodell said. “It is a very good idea to do multi-year budgeting, with the consideration that estimates are less reliable farther out (in time).”

Goodell said that long-term budgeting can help municipalities make responsible long-term choices.

“The challenge is to recognize when short-term solutions create long-term problems,” Goodell said.

According to Goodell, the legislation is currently stalled in the Assembly’s Local Government Committee.

Don Emhardt, town of Chautauqua supervisor, said that he was not sure if the legislation would be helpful.

“We do our own annual budgets,” he said.

According to Emhardt, the comptroller audited the town between the periods of Jan. 1, 2012, and July 16, 2013, finding the town to be in “fiscal stress.”

“We got it fixed this year,” Emhardt said of the audit. “The comptroller is doing a good job of staying on top of this – it’s always helpful to have a second set of eyes come in.”

Emhardt also said that to his knowledge, most of the municipalities in Chautauqua County have submitted to the comptroller’s audits.

Daniel Caflisch, town of Clymer supervisor, said that budgeting is not generally an issue in Clymer.

“We budget year-to-year,” Caflisch said. “It’s tough for us to project out.”

Caflisch noted that the town’s budget is generally less than $800,000.

“We have no issues with deficits … we try to keep debt at a minimum,” Caflisch said.

According to Sally Carlson, town of North Harmony supervisor, North Harmony budgets are for the most part completed yearly.

“For long-term planning, the highway superintendent has a ‘wish list’ of equipment he’d like to replace in the next five years, and we try to gauge his needs,” Carlson said. “(Our budget) changes – nothing is concrete … you just do the best that you can do.”

Carlson said that North Harmony does not ordinarily have budget deficits. A capital fund is in place to purchase highway equipment in the town and another is preceding the construction of a new town building.

The proposal is part of the comptroller’s fiscal stress initiative that includes the creation of a Fiscal Stress Monitoring System for local governments. The system, implemented last year, uses financial indicators that include year-end fund balance, cash position and patterns of operating deficits to create an overall fiscal stress score which classifies whether a municipality is in “significant financial stress,” in “moderate fiscal stress,” is “susceptible to fiscal stress” or “no designation.”

Recently, the Comptroller’s Office audited local towns and villages, including Chautauqua, Forestville, Poland and Carroll, requiring corrective measures to be taken by local officials.

DiNapoli’s monitoring has identified a total of 142 municipalities in some level of fiscal stress, including 16 counties, 18 towns, five cities, 16 villages and 87 school districts.