Fiscal problems in New York

NY has been ranked 46th of the 50 states in overall fiscal solvency. Illinois is last at 50. The State Comptroller developed a Fiscal Monitoring System which is a tool for measuring the degree of fiscal stress in the state's municipalities and school districts.

Click here for the Fiscal Stress Monitoring System which lists current municipalities and school districts under fiscal stress.

NYS also has numerous 'Authorities' which can get themselves into fisal difficulties. "The State relies on public authorities to undertake most borrowing on its behalf, and these entities have issued nearly 96 percent of all outstanding State-Funded debt without the voter approval that the Constitution requires for General Obligation debt issued by the State itself. The State also uses public authorities as a backdoor source of revenue."

Thomas P. DiNapoli State Comptroller

State authorities are responsible for critically important functions in transportation, energy, environmental protection, housing, economic development and other areas. NY has more than 1000 Authorities. Examples include: Metropolitan Transportation Authority (MTA): Thruway Authority; New York City Transitional Finance Authority (TFA); Dormitory Authority of the State of New York (DASNY).

A Public Authorities Control Board (PACB) was created in 1976 as a response to a financial crisis at the State Urban Development Corporation but has since been expanded. The PACB’s role is very powerful: The three voting members must now approve financing and construction of any project proposed by 10 specified authorities.

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When the fiscal condition becomes dire a Fisal Control Board is appointed to avoid and prevent default on bond payments because democracy has failed. All kinds of ways are used to prevent default including (but not limited to) increasing revenue; decreasing spending; shifting debt to the state; and creating entities to assume financing responsibility for the troubled municipality, school district or authority.