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N.Y. Gov. Cuomo proposes restructuring board for distressed cities
May 14, 2013 / 10:56 PM / 4 years ago

N.Y. Gov. Cuomo proposes restructuring board for distressed cities

May 14 (Reuters) - New York Governor Andrew Cuomo on Tuesday proposed creating a state-level restructuring board to help fiscally distressed cities and towns manage their finances.

Cash-strapped cities, particularly those in upstate New York, could ask the board for assistance, Cuomo said at a televised news conference.

Advice from the panel also comes with funding, as the state’s fiscal 2014 budget includes $80 million to help municipalities with reorganization efforts. But for any city, county or town that accepts the funding, the panel’s recommendations would be binding.

The restructuring board would include the State Budget Director, Secretary of State, Attorney General, Comptroller and a private sector financial professional.

Some New York cities rely heavily on state aid. A third of Buffalo’s budget comes from state funds, along with nearly a quarter of the budgets of both Syracuse and Yonkers, Cuomo said.

“The state is not in a position to financially subsidize insolvent governments, because the state has its own fiscal issues,” Cuomo said.

His proposal must be approved by state lawmakers.

The panel could require municipalities to merge, consolidate or share services, and it could recommend that a local government have fewer elected officials. Those changes would be “organic,” Cuomo said.

Asking for help from the panel could be an intermediary step before a budget control board steps in. Nassau County, for example, is currently operating under a control board.

Cuomo’s proposed board would also function as an expedited binding arbitration panel that local governments and unions could use voluntarily to resolve contract issues within nine months.

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