OAKFIELD — Oakfield and Yates were deemed for the fiscal year of 2019, pre-pandemic, to be under moderate stress.
The findings were part of a report released last week by State Comptroller Thomas DiNapoli. It warned the COVID-19 pandemic could push more governments into fiscal stress.
“We’ve been closely tracking the trends and common problems that communities in fiscal stress are facing,” DiNapoli said. “Now the economic damage caused by the pandemic has dramatically altered the fiscal landscape, and many communities are struggling to provide critical services and pay their bills. Without aid from Washington, the options are bleak for local governments trying to stay in the black, and many more local governments may be pushed into serious fiscal stress.”
The state’s monitoring system informs the public about local governments’ financial health by evaluating and scoring municipalities on financial indicators such as year-end fund balance, cash-on-hand, short-term borrowing, fixed costs and patterns of operating deficits. The system also evaluates population trends, poverty and unemployment to establish separate “environmental” scores for each municipality.
According to the Comptroller’s Office, “the one thing all stressed local governments have in common is low fund balance, which reduces their capacity to deal with revenue shortfalls and expenditure overruns.”
While not all local governments who run operating deficits may or may not be heading toward fiscal stress, almost all governments in stress have been running repeated deficits. The other indicators of a municipality heading toward fiscal stress are:
Many local governments also have to deal with environmental challenges that increase their chance for fiscal stress, such as high poverty rates, depressed home values, declining household incomes and high unemployment rates.
With COVID-19 having a significant impact on local governments, some other fiscal challenges local governments can face in 2020 include:
• A sharp decline in sales tax revenues.
• Significant withholdings from state aid to local government.
• Existing stress, especially low fund balance.